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Steel price rise won't hit consumers
Updated: 2004-12-07 13:46

The latest price-hike by a leading steel maker will not have much impact on individual consumers, today's Beijing Youth Daily said, citing industry analysts.

In newly released price quotes from Shanghai Baosteel Group Corp, the company has raised the prices of its steel products up by an average 6 percent for the first quarter of next year.

For example, hot steel roll sheets will rise 7.5 percent, or 300 yuan (US$36) per ton (tax-excluded), and cold sheets will jump 9.7 percent, or more than 400 yuan a ton (tax-excluded).

The steel sheets for electric household appliances and electricity generation grid equipment will increase nearly 11 percent.

The move, an indication of the rebounding raw material market, is also regarded by many consumers as a sign of possible price rises for more consumer commodities.

However, industry analysts say the worry is not necessary.

Prices of automobiles, big consumers of Baosteel products, will be unlikely to rise, according to Jia Xinguang, chief analyst with China Auto Industry Consulting Co Ltd, as quoted by the Beijing Youth Daily report.

He said steel prices have kept rising in the past two years, but auto prices have kept falling. While the output of China's auto industry has grown 20 percent, the added value has slipped by 2.7 percent. This indicates steel price changes haven't affected auto prices, Jia pointed out, though steel is an important raw material of the car industry.

To cut their stockpile, automakers have rushed to axe prices to boost the demand, he noted.

Prices of home appliances, another key consumer of steel products, will also not rise, as manufacturers don't plan to raise prices to offset the cost increase.

Liu Hui, spokesperson with Kelon Group, a leading home appliance company in Guangdong Province, said his company would not mark up their prices.

Since air-conditioners and refrigerators are the two leading two products for steel consumption, Kelon completed their orders for next year's steel sheet supply as early as this September, which means Baosteel's price increase will not affect its products in 2005.

Kelon is billed as the country's largest refrigerator maker.

Sources from Gume Home Appliance Co Ltd, a leading home appliance retailer, indicate this steel price rise will not affect the retail appliance prices.


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