China: Baosteel raises HRC list price by $54/t for Feb ’21 delivery

China’s major steel producer- Baosteel has released its flat steel product list prices for Feb ’21 delivery.

As per company’s official publication, the list price for:

• HRC- increased by RMB 350/t ($54)
• Heavy plates- raised by RMB 300/t ($46)
• CRC- up by RMB 400/t ($62)
• Hot Dipped Galvanized- spiked by RMB 700/t ($108)

These prices are of the Baoshan works in East China’s Shanghai, the Meishan mill in East China’s Jiangsu, its Qingshan plant in central China’s Hubei, and the Dongshan works in South China’s Guangdong province. Heavy plate prices were increased for the Baoshan and the Dongshan works in South China’s Guangdong province.

In the previous month, the manufacturer had announced a price hike of RMB 100/t for
HRC and CRC, RMB 50/t for heavy plates and RMB 100/t for Hot dipped Galvanized steel for Jan ’21 deliveries.

SteelMint has analyzed following reasons behind the surge in prices

• Robust demand- The downstream industrial demand has been robust with increased trade activities in the country. Improved demand and activities across major steel consuming sectors with an effective and rapid control of COVID-19 pandemic has kept the demand buoyant. In Nov ’20, the uptrend in Chinese domestic auto sales continued, with the total increasing by 7.6% m-o-m and 12.6% y-o-y to 2.8 million units, CAAM statistics showed.
• Soaring domestic steel prices- Following the rally in futures market over Dec ’20, the domestic steel prices have ranged higher and this has lent further support for price increases.The domestic market prices for HRC have witnessed a steep ascent of RMB 360/t on monthly basis standing at RMB 4,540-4,580/t (Eastern China) in Jan ’21 beginning against RMB 4,220-4,220/t (Eastern China) at the beginning of Dec ’20.

  Prices of Rebar spiked by RMB 480/t to stand at RMB 4,510-4,530/t (Eastern China) at Jan’ 21 beginning against RMB 4,030-4,060/t (Eastern China) at Dec’20 beginning.

• Production restriction- Low production amid ongoing Autumn-Winter production curbs until Mar ’21 has restricted supplies in the domestic market. Further, to promote low-carbon initiatives and green projects, China’s Ministry of Industry and Information Technology has announced stricter regulations for production curbs.

Outlook- Prices are expected to gain momentum on robust domestic demand along with strong futures. Also, implementation of production cuts may reduce supplies and will push prices in domestic markets