Baosteel’s latest flat steel price cut ‘no surprise’, says JP Morgan

Investment bank JP Morgan said the July delivery price cut implemented by Baoshan Iron & Steel (Baosteel) comes as “no surprise” given the downward trend in Chinese spot prices.

Paragraph entered by Atlantic migration, in order for SteelFirst articles to display correctly on Metal Bulletin.

On Saturday June 8, Baosteel reduced its domestic prices on major products for July delivery, with hot rolled coil (HRC) and cold rolled coil (CRC) both cut by 200 yuan ($32) per tonne.

This is the Chinese mill’s second price cut in as many months. In May, Boasteel reduced its list prices by 150-180 yuan ($24-29) for June deliveries.

“Chinese spot prices have been falling since the end of the Lunar New Year holiday, making Baosteel’s price cut simply part of the larger trend in our estimation,” JP Morgan said in a research note seen by Steel First.

“Chinese crude steel production has recently begun declining, which has spot prices showing signs of a bottom. Given this, we think Baosteel’s move could generate expectations for a bottom in Chinese domestic steel prices,” the note said.

The investment bank said that both Baosteel and Angang Steel expect prices to hit the floor in June before a recovery in the third quarter this year.

What to read next
Any bolstering effect on US ferrous scrap exports from the up-month in February’s domestic trade will be tempered in the immediate aftermath of two earthquakes in Turkey — the country’s largest importing region — on Monday, February 6
Steel trading and production have come to a halt in the eastern Turkish region of Iskenderun following a devastating earthquake that hit the region on Monday February 6 and put mills in the area under force majeure, sources told Fastmarkets on Tuesday
A 120-day closure of four Illinois dams scheduled for 2023 will disrupt barge shipments and have potentially both negative and positive impacts on scrap and finished steel products from Canada to Texas
Market participants are cautiously optimistic about a rebound in iron ore concentrate premiums, with steelmakers around the world set to ramp-up production in line with an anticipated increase in demand for steel products, Fastmarkets understands
General Motors (GM) is investing $650 million to develop the Thacker Pass mine in Nevada, the largest known source of lithium in the US and the third largest in the world
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.