Price of cold-rolled steel to rise in May

Leading Chinese steel maker Baoshan Iron and Steel Co said Tuesday  it would raise prices for key products for May delivery.

Leading Chinese steel maker Baoshan Iron and Steel Co said Tuesday it would raise prices for key products for May delivery.

Baosteel said prices for cold-rolled steel products would be increased by 200 yuan ($29.29) per ton while it would keep most hot-rolled steel prices unchanged, it said in a statement published on the website www.bsteel.com.cn.

Baosteel's pricing decisions are regarded as a benchmark for the rest of the industry, and other mills are likely to follow suit by raising their own ex-factory prices for May.

The sector as a whole has been facing massive increases in the prices of raw materials such as iron ore and coking coal, as well as power generation and freight fees.

Those factors have left many mills concerned about their ability to pass the price hikes on to consumers.

The price of Indian 63 percent FE iron ore surged to $183 a ton Tuesday, according to industry consultancy Mysteel, up 54 percent since the beginning of the year.

It was the highest point the steel had hit since August 2008.

An analysis released Monday by the China Iron and Steel Association (CISA) said that despite a seasonal increase in demand in the second quarter, the market was unlikely to tolerate any massive steel price increases in the coming months.

"Because of factors like the relatively fast growth in steel production, the high level of stockpiles and relatively low export volumes, oversupply on the domestic market has not noticeably eased, and big price rises are not likely," the CISA said.

"Although some of the cost pressures can be passed on, steel product prices cannot rise without limit, because the tolerance of downstream sectors needs to be considered," it added.