Baosteel cut prices third time since Jun-12 on sluggish demand and low Iron ore prices. Baosteel's pricing decisions are generally regarded as a
bellwether for the industry. A price cut for September is
significant, because steel demand in China usually increases in
September and October when construction picks up.
Hot-rolled coil prices will be cut by 100 yuan ($15.73) per
tonne and cold-rolled coil prices of some grades by 150 yuan per
tonne, Baosteel said on its website on Friday. Both products are
used in construction, manufacturing and automaking.
“Steel demand remains sluggish. We estimate that even if
steel demand improves in the third and fourth quarters, the
overcapacity would overwhelm any significant price upside
potential, and steel mills would continue to struggle to reach
breakeven,” reports market participant.
1$= 6.36 yaun.
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