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POSCO Increase 6% Steel Price
23/06/2010
SEOUL - Pohang Iron and Steel Company Ltd. (Posco) said it would raise steel product prices of about 6% as of July 2010. However, this increase cannot be cited to cover increased production costs from soaring raw material price increases.
Posco, the world's fourth largest steel producer explains steel prices for hot-rolled steel in the country would rise to 900,000 won per ton from the previous price of 850,000 won per ton. "The price of steel plate steel will increase to 950,000 won per ton from 900,000 won per ton," Posco said yesterday.
Last April, Posco also raised steel prices for the domestic market amounted to 25%. The increase in April is the first adjustment after last year Posco lowered prices by 20% in May.
Posco explains, this price increase had to do because the price of iron ore imports raise continuously. In the third quarter iron ore prices surged more than 20% compared to second quarter. This means that the price increases 110,000 won up to 120,000 won per ton of steel products last.
"This price increase is not entirely the same as the rate of increase of raw price increases. Markets had anticipated the price increase of 10%, and announcements (Posco) approaches, "said SK Securities analysis, Lee Won-Jae.
"This (increase) may be due to China's steel prices weakened lately. Posco also take into account that the main consumers, such as developers, are still struggling. "Another Won-Jae.
Posco CEO earlier this month, Joon-Yang Chung said conditions in semester II/2010 steel will be very difficult. The reason is, will the excess supply in the South Korean market as the increase in steel imports. South Korean steel demand in 2010 is predicted to grow 13%. Unpredictable spikes in demand occur in semester II/2010.
The increase is smaller than market predictions, but I measure it more prudent step Posco, but give you a semester II/2010 conditions are more uncertain, "said analysis of HI Investment & Securities, Chung Ji-yun.
As the world's largest producer, Posco is still rank below the Arcelor Mittal (India), Nippon Steel Corporation (Japan), and Baosteel Co. Ltd. (China), and Posco will adjust the price per quarter following the change in price of iron ore from Vale, SA, BHP Billiton Ltd. , Ltd. and Rio Tinto Plc has decided to adjust the price per quarter. Meanwhile, Baosteel quarterly prices declined three iron ore producers but were forced to accept a third the price of iron ore producer.
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