SHANGHAI, July 13 -- China's Baosteel (600019.SS: Quote) will cut hot-rolled steel prices by 200 yuan per tonne and cold-rolled prices by 300 yuan per tonne in August, Chinese traders and analysts at four different companies told Reuters.
The price per tonne of hot-rolled coil will fall 4.6 percent to 4,192 yuan ($619.2), while that of cold-rolled coil will drop 5.4 percent to 5,146 yuan, according to Reuters calculations.
The move was widely anticipated, with Chinese spot market steel prices down almost 15 percent from their late-April peak amid tepid demand and frantic destocking.
"Baosteel's move to drop prices was expected already, but I think this is not a big cut," a trader based in Shanghai said.
"If steel prices continue falling, we will see more price cuts in September," he added.
The monthly benchmark price adjustments by Baosteel, China's second biggest steel enterprise in terms of output in 2009, usually set the tone for the industry as a whole, and traders said they expected other mills to quickly follow suit.
While production is likely to decline in the second half of the year as a result of falling demand from the construction and real estate sectors, total Chinese crude steel output is still expected to end the year at 620-630 million tonnes, a new record and up to 9-10 percent compared with 2009, industry ministry Li Yizhong said on Monday. ($1=6.770 Yuan)