Baoshan Iron and Steel Co Ltd (Baosteel), the country's largest steelmaker, has cut sale prices of its main products for December by as much as 1,000 yuan, making it the fourth such reduction this year.
In a notice to customers, the listed unit of the country's largest steelmaker said it is reducing prices on five categories of steel products. Cold-rolled steel prices have been reduced by 970 yuan per ton while hot dip galvanized steel and acid pickling steel prices have been cut by 1,000 yuan per ton.
"By lowering product prices, Baosteel is able to utilize its enormous stockpile of iron ore and also maintain a resilient cash flow," said Wang Jianhua, director with Mysteel.com, a steel information and data provider.
Analysts said Baosteel's prices have been always above market average and the cut will help them return to reasonable levels.
According to Jiang Qiu, an analyst with Guotai Jun'an Securities, Baosteel's prices were about 1,000 yuan above market average prior to the present cut. The analyst, however, said the price cut would not trigger a domino effect across the whole steel industry.
Baosteel had earlier said it expects losses from its carbon and stainless steel product sales in the fourth quarter due to weakening demand.
(China Daily November 25, 2008)
