Baosteel to raise steel prices or discourage iron ore negotiations

Every reporter Wei from Beijing yesterday, Vale of Brazil announced the 2009 iron ore Chang agreement with Nippon Steel and POSCO, South Korea.　　On the same day, Baosteel said it would raise the ex-factory price of steel in full next month, which experts say is not conducive to China's iron ore negotiations. The continued pick-up in demand for steel has given Baosteel a chance to raise the price of its steel factory. Yesterday, the reporter learned from the internal Baosteel, Baosteel's overall increase in July steel factory prices, hot-rolled and cold-rolled respectively up to June up 500 yuan/ton and 400 yuan/ton, but the specific range is still possible fine-tuning. Industry analysis that the adjustment of Baosteel is higher than market expectations.　　At a crucial juncture in the final round of iron ore negotiations, domestic steel prices will have a negative impact on China's negotiations. Steel price rebound Baosteel reinforced Baosteel policy shows that the July cold-rolled, hot-rolled, hot-rolled pickling, galvanized, silicon steel and other major varieties in the June prices on the basis of the increase 350~500 yuan/ton. "With the domestic demand for steel gradually warmer, steel inventory pressure relief, domestic steel prices from the late April began to rebound continuously, has been linked to a 7-week rise." Baosteel's July price hike was expected.　　"Union Metal Steel analyst Zhang Ping to the daily economic news reporter said."　　A person unwilling to be named in the industry to our correspondent said that the adjustment of Baosteel this time than the previous market rumors of 200~300 yuan/ton obviously to high, which reflects the expectations of Baosteel to a certain extent, but also for the June major varieties out of the moderate increase in the flat plate. "Angang, Benxi, Wisco and many other steel mills are generally up to June factory prices, and Baosteel June factory prices go flat." At present, Baosteel hot rolling price of 3600/ton, basic and Shanghai second-line steel prices flat. And ordinary Baosteel hot-rolled to be higher than 200~300 yuan/ton. In the face of market spreads, Baosteel also wants to take this opportunity to fill up.　　Zhang Ping analyzes the way.　　Steel companies adjust prices to pass on cost pressures? "The price adjustment may also be due to the expected consideration of the ore negotiations."　　Said the person who did not want to be named. South Korea has now reached an agreement with Rio Tinto to cut its annual Chang price by 33%. While the Chinese insist on a 40% per cent drop, the industry is not too bullish on the Chinese side to talk about the decline. "The market expects Chang to fall by 40% per cent this year," he said. Once the decline is not expected, the production cost of steel companies will be increased, so that the price to transfer this part of the cost, in the market bullish bidding homeopathy.　　The industry said. This analysis may not be an assumption. Yesterday, a large Taiwanese steel company on its website clearly said the price increase was due to the decline in iron ore is not up to expectations.　　At the same time, coincided with the global steel market inventory adjustment came to an end, replenishment inventory demand release, some steel products have appeared supply tight phenomenon, and finally led to strong steel prices, they decided to comply with the steel price rally, adjust the 7 August domestic price. The iron ore negotiations of the 2009 annual price increase or unfavorable Chinese iron ore negotiations entered the "Sando Mamang" moment, CISAMade it clear that it would not accept a 33% per cent drop in Rio. And China's killer is that domestic demand is still depressed, domestic steel prices have been low.　　Industry insiders worry that Baosteel's price adjustment will lead to another round of steel prices, which is not conducive to the Chinese side to continue to undercut. "Baosteel's price adjustment has the role of ' vane ', once other steel companies with the rise, will likely lead to domestic steel prices, which has a certain negative impact on the Chinese iron ore negotiations."　　"Zhang Ping thought. However, some people in the industry expressed different views. "As a business, Baosteel's price adjustment is a normal business behavior, it is impossible to give up the profits because of iron ore negotiations." In addition, iron ore negotiations on the price of a year, Baosteel's monthly adjustment is far from affecting the iron ore negotiations.　　"said Jialiang, deputy general manager of my steel network.　　The Brazilian Vale announced that it had reached the 2009 iron ore Chang agreement with Nippon Nippon Steel and POSCO, South Korea, with a 28.2% reduction in the 2009 ore price, a 44.47% reduction in ore prices and a 48.3% reduction in the price of the pellet. Related news 240 million U.S. dollar investment and Mineral Resources reporter learned yesterday that China Wisco Group and Canada CLM Iron Ore Company signed the acquisition agreement. Wuhan Iron and Steel group will carry out 240 million dollar strategic investment to CLM.　　The project is still subject to approval by the relevant Chinese authorities and the Toronto Stock Exchange. According to the agreement, Wisco will subscribe to 2.72 Canadian dollars per share of the CLM company's 38.7 million shares, a total value of about 105.2 million Canadian dollars, accounting for CLM Company's total shares of 19.99%, and won a board seat.　　According to the agreement, CLM and Wisco to terminate the contract, all need to pay the other party 2 million U.S. dollars cancellation costs. Rio Tinto has faced strong resistance to abandon "Chinalco", giving the industry a hint of concern about the prospects of Chinese companies investing in minerals overseas. "The possibility of the purchase being rejected by Wisco is slim. First of all, China's investment in the mining industry is not intensive;　"Beijing Steel Union McGrady information director Xu Xiangchun to reporters. Every journalist Wei