Ma Guoqiang, general manager from Baosteel explained the company’s price lifting strategy in the interview on December 16. He said that “it is mainly determined by both sides of supply and demand and is in line with the recent market as well as the inventory”.
After price increase, large steel enterprises such as WISCO also raise its price. Some people argued that the chain price rising is not favorable for the elimination of excess capacity and the new round of iron ore price negotiation. Certainly the price increase affected the expectation of the iron ore suppliers to some extent, but as a listed company, Baosteel should consider the interests of shareholders rather than curb the price increase for iron ore negotiation. In fact, steel enterprises such as Baosteel take an optimistic attitude toward the demand in latter market and believe their stocks are in a normal level. Based on this, enterprises and some experts thought the steel price would present a rising tendency with stability.
Steel demand and the price will both change significantly in 2010. Till now, stocks of raw material and finished products in Baosteel are basically in a normal level.
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