Baoshan Iron & Steel Co., China's biggest steelmaker, plans to raise prices in the first quarter to cover surging costs that had led to its first profit decline in more than a year last month.
Prices of benchmark hot-rolled products will increase by as much as 8 percent, or 300 yuan ($40), a metric ton from the prior quarter, the Shanghai-based company said today in a statement. That's the first price gain since March, and matches the increase announced for the same period by ArcelorMittal, the world's largest steelmill, yesterday.
Baoshan, Japan's JFE Holdings Inc. and South Korea's Posco posted profit declines last month due to rising iron ore, nickel and shipping costs, and analysts forecast costs could rise more. Global steel demand may rise 6 percent in 2008, allowing mills to charge more and cover costs, ArcelorMittal said.
``Costs are rising so Baoshan needs to pass them onto the customers,'' Liu Bin, a Shanghai-based analyst with CSC International Holdings Ltd., said. ``Its hot-rolled prices were already lower than its peers in the fourth quarter.''
Baoshan Steel rose as much as 3.6 percent to 16.21 yuan today in Shanghai, trading at 16.10 yuan at 1:09 p.m. local time. Chinese rivals also gained, with Angang Steel Co. rising 8.4 percent and Wuhan Iron & Steel Co. up 4.8 percent. Baoshan has fallen 14 percent since it announced a 50 percent third-quarter profit decline on Oct. 29.
Full Story Bloomberg.com: Asia
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