The increase in supply reflects expectations of a future improvement in demand

Baoshan Iron & Steel (Baosteel), a subsidiary of the world’s leading steel producer China Baowu Steel Group, has raised prices for its main flat steel products, including hot-rolled coil (HRC), for domestic sales in August.

The increase amounts to 50 yuan per tonne ($7.4/t).

According to a Shanghai-based ferrous metals analyst, the price rise for August partly reflects the major steel producer’s expectations of a future improvement in demand from end-users.

According to BigMint, the price hike was likely driven by rising raw material costs, particularly metallurgical coke.

Currently, demand for flat steel in the processing sector remains low due to weather conditions, whilst purchasing activity in key steel-consuming sectors remains weak.

It should be noted that in June, Baosteel maintained its domestic prices for flat steel for July sales. The exception was grain-oriented electrical steel, for which the company raised its price by a further 300 yuan per tonne ($44.3/t).