Shanghai Securities News cited Mr Ma Guoqiang GM of Baosteel replying to the paper aiming to clarify Baosteel intention on roundly uplifting January ex works prices that Baosteel plans to enlarge its auto sheet capacity by 15% since the product is sold like hot cakes this year.

He shows an optimistic altitude on next year steel industry and doesn’t think iron ore price will rise up next year.

Mr Ma clarifies that “The price policy is mainly decided by the real
supply and demand situation. As a listed company, Baosteel must take
shareholders’ interest into account at first. He doesn’t deny there
will be a certain support to the ore suppliers’ expectation.”

As introduced by the GM, some products of Baosteel especially for auto
sheet facing very hot sales at present. Thus, the steelmaker makes
further adjustment plan to the product mix. According to the plan,
Baosteel will expand its auto sheet capacity by 15% and add new lines
to household appliance sheet production.

Meanwhile, Mr Ma doesn’t think that long term ore price will be
successfully lifted up again next year since the iron ore uprising
space will be limited by the general circumstance in which global steel
output decreases largely, steel price plunges main steelmakers are
right in the rim of deficits.

As to the continuously hiking spot ore price, Mr Ma notes that as a
long term ore buyer, Baosteel feels less impression and has a stable
stock of raw materials.

Source: Shanghai Securities

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