It was reported that after the government restrained lending, Baoshan Iron & Steel Co., China’s largest steelmaker, kept prices for its main products unchanged for February delivery.
Prices were kept level for most flat products, including hot-rolled, cold-rolled, zinc-galvanized sheets and silicon steel, from January, the Shanghai-based steelmaker said today in a statement on bsteel.com.cn, its trading Web site.
“The market has widely expected that Baoshan would raise prices for February,” said Luo Wei, a Shanghai-based analyst with China International Capital Corp. “Baoshan made such a decision probably because the government is tightening.”
China raised the proportion of deposits that banks must set aside as reserves this month, faster than economists expected, as record lending threatens to stoke inflation and create asset bubbles.
Rising steel demand prompted Baoshan Steel to raise some prices for January by 8 percent, the first gain since September.
Baoshan Steel shares rose 0.6 percent to close at 8.71 yuan in Shanghai. The benchmark Shanghai Composite Index gained 1.4 percent.
Chinese steel prices have surged 18 percent since Oct. 15, a low in 2009, as the government’s $586 billion stimulus spending boosted demand, and manufacturers and traders ran down inventories.
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