BaoSteel announced their prices for some of the products for April this noon. And the prices of pickling products, HR, galvanized products, electrical steel, etc were surprisingly kept unchanged.
　　
　　Steel futures and over-the-counter electronic market responded quickly. Just after ten minutes of BaoSteel’s announcement, the contract prices showed a sharply down trend. The spot market also reacted afterwards, for example HRC prices in Shanghai dropt from CNY 4200 per tonne to CNY 4160 per tonne at 15:00, and HRC prices in Tianjin decreased by CNY 40 per tonne to CNY 50 per tonne in one day.
　　
　　Back to the Chinese New Year, HRC was CNY 3750 per tonne. And the unexpected hike of iron ore price is seen as the initial driving force to this round of prices hiking. Comparing to the highest now, HRC price has already rose by CNY 470 per tonne, 12.5% YoY.
　　
　　Because of the rumors of sharp rise in iron ore price, most predict that Chinese large steel mills will hike prices by CNY 200 per tonne to CNY 300 per tonne. Thus the steel prices started a sharply and strong pulled up process from mid-March. The steel futures and over-the-counter electronic market also added the fuel.
　　
　　Although BaoSteel’s prices unchanged announcement extinguishes the rising flames, an expert said as a positive factor to the prices hiking, the prices of the three major steel mills have been speculated ahead. So the impact of steel price adjustment has been digested in advance. Once the adjustments become clear, a pullback after the sharp hike is a normal phenomenon. Thus market participants do not have to panic too much.