No rebound seen despite Baosteel price rise

PUBLISHED : Friday, 26 December, 2008, 12:00am
UPDATED : Friday, 26 December, 2008, 12:00am

Although top mainland steelmaker Baosteel Group is raising prices of its products for February delivery by 6 to 8 per cent, analysts say the increase, Baosteel's first in five months, is hardly a sign of the steel market rebounding.

Baosteel, which always announces its product prices month by month and two months earlier than other steelmakers, was just following other major mills in raising its prices, said Xu Xiangchun, the chief information officer of steel data provider Beijing Ganglian Maidi e-Commerce.

Steelmakers such as Angang Steel raised their January product prices after spot steel prices started to stabilise last month, rebounding about 6 per cent from their October lows.

Mr Xu said the price rise did not necessarily signal a general recovery as global demand remained fragile and the first quarter was the low season. 'We need more time to observe the trend, and maybe in the second quarter we will see a more solid rebound.'

Even at current prices, major steel mills were still suffering losses, he said.