Baosteel’s steel price increase in October was “relatively restrained”

Baosteel Co., Ltd. released the price of its main carbon steel products in October on the 14th, which is a “surge”. The ton price rose by between 100 and 380 yuan, and individual varieties set a “flat plate”. Market analysts believe that although the “power cuts and production cuts” in some regions in China have led to an increase in spot steel prices, the sustainability of this impact remains to be seen in the absence of significant downstream demand. Baosteel's current pricing appears to be “relatively restrained” in terms of gains, which is related to the current demand release situation.

It is understood that the pricing of Baosteel's main carbon steel products in October is: the price of hot-rolled products is increased by 150 to 300 yuan on the basis of September prices; acid products are generally raised by 260 yuan; ordinary cold-rolled products are raised by 110 to 200 yuan; Galvanized, galvanized and electro-galvanized products are priced upwards ranging from RMB 100 to RMB 350. The prices of individual specifications remain unchanged. Non-oriented electrical steels are increased by RMB 350 to RMB 380 while the price of oriented electrical steel remains unchanged. It is generally raised by 150 yuan.

Most market participants believe that Baosteel’s price increase and relative increase in control are among market expectations. Wang Jianhua, a researcher at the “My Steel” Information Institute, said that in some parts of the country, “power cuts and production cuts” have caused steel prices to rise recently. However, this effect is mainly reflected in the construction steel product, and the “response” on the board is relatively small. At present, the release of downstream demand for steel products is basically a “seasonal performance”. It is often repetitive and has not yet seen a clear and fundamental phenomenon of heavy volume. Therefore, the steel market as a whole still has demand pressure.

The relevant analysts believe that "the steel price has upward momentum, but there is still a lot of pressure on the upside." This is one of the main reasons why Baosteel’s “price increase is relatively restrained”. From the perspective of Baosteel's pricing, its judgments and views on the market outlook are "optimistic factors, but there are also not optimistic considerations." In addition, the ore price in the fourth quarter will have a decline of about 10%. The cost pressure will have some looseness, and it will not support the sharp increase in steel prices.

There are also market participants who believe that large-scale steel companies such as Baosteel “have little problem with annual results” and will not excessively pursue high profits at this time. In the current domestic "sprint" of energy-saving emission reduction targets, if the increase in steel prices is too large, it may cause the "following rise" in ore prices, which brings a series of problems. "From the overall economic environment is not appropriate".