It reported that Baosteel has raised steel price for August recently and the price growth rate is CNY 200 per tonne to CNY 400 per tonne.

Baosteel raised the price of general CR steel products up by CNY 200 per tonne for August and the price of SPCC 1.0×1250 steel coil after the adjustment is CNY 6,496 per tonne. HR steel price increases by CNY 300 per tonne and the price of SS400 5.5×1500 is CNY 5,292 per tonne after the price rise. Meanwhile, the price of pickling steel products rises up by CNY 200 per tonne while wire price comes up by CNY 400 per tonne. All prices above exclude 17% VAT.

An analyst said Baosteel has not reported the information publicly by now, and the price rise was probably made according to the price policy for July. There are two reasons for Baosteel to increase steel prices.

1. The expanding price gap between domestic and international steel market. HRC export price is approaching to USD 1,100 per tonne, but domestic price is USD 860 per tonne which will stimulate the hike of Chinese steel export.
2. The sustaining increase of domestic steel production cost, due to the further increase of coking coal and coke prices.

Analysts believed that Baosteel will raise prices of some steel products again in the future, which may bring effects to domestic steel market.

In a landmark trade case, the U.S. International Trade Commission ruled Friday that hefty tariffs will be slapped on Chinese pipe imports for the next five years.

By a 5-0 vote, the ITC said American pipe producers were being wrongfully harmed by Chinese pipe producers. Wheatland Tube Co. and five other American producers had petitioned the ITC for trade penalties against China because pipe products were being dumped on American shores. They also said the Chinese government was unfairly subsidizing that industry.

The ITC agreed in both instances and ordered that duties ranging from 99 to 701 percent be imposed on Chinese circular welded pipes.

Dumping means a company was selling an item below the cost it took to produce that product.

This marks the first time an American industry has won a decision to inflict tariffs on a Chinese product based on the argument that the Chinese government was unfairly subsidizing a Chinese industry.

American pipe producers said that in 2007 China exported 750,000 tons of pipe to the U.S. Friday’s ruling means there’s almost no chance that any further Chinese pipe imports will hit American docks over the next five years, industry leaders said. Pipe entering the U.S. from China has skyrocketed. In 2002, only 10,000 tons entered the U.S.

Over that same period, four American pipe plants –– including Wheatland Tube’s Sharon plant –– have closed, with 500 workers losing their jobs.

Smiles began breaking out on local pipe executives and workers as word of the trade case spread.

“It’s justice,’’ declared Barry Zekelman, chief executive officer and president of John Maneely Co., which owns Wheatland Tube. “I’m happy for the workers. I really am. It’s a great day.’’

He estimated the 750,000 tons of Chinese pipe imports entering the U.S. could be valued at $1 billion.

“To say that now there’s $1 billion up for grabs is unrealistic,’’ Zekelman said. “Other imports have replaced a good portion of that. But there’s still a nice chunk of it up for grabs.’’

Since the trade penalties formalized Friday by the ITC have been in place on Chinese pipe products under previous rulings since last November on the unfair subsidies, and since January on the dumping, Wheatland Tube is already seeing the results.

“The imports of Chinese pipe have dropped off the map since the fourth quarter of last year,’’ Zekelman said.

A number of laid-off Wheatland Tube workers have been brought back since the initial rulings, he said, but didn’t give a specific figure.

Current production could increase further.

SHANGHAI, China, June 24 /Xinhua-PRNewswire/ — China Precision Steel (the ”Company”) (Nasdaq: CPSL - News), a niche precision steel processing company principally engaged in producing and selling high precision cold-rolled steel products, today announced that the Company’s ultra-thin and high-strength cold-rolled steel strip products were awarded ”Project Converting Advanced New Technological Achievements into Productivity” certifications by the Shanghai Municipal Office for Converting Advanced New Technological Achievements into Productivity in June 2008.

China Precision Steel’s ultra-thin cold-rolled and high-strength cold- rolled strip products utilize patented systems and high technology reduction processing procedures. The certifications include about half of the Company’s ultra-thin and high strength cold-rolled products, used in the manufacture of automobile parts and components, steel roofing, plane friction discs, appliances, food packaging materials, saw blades, textile needles, and microelectronics. Receiving these certifications allows China Precision Steel to take advantage of the preferential treatment provided under the provisions of the Chinese government’s Science and Technology Ministry. Benefits include financing for accredited projects at a discounted interest rate, refunds of land use fees related to accredited projects and special tax treatment for corporate and value added taxes by local tax authority, subject to further approval.

”We focus our efforts on utilizing advanced technology for developing quality products, and the receipt of this prestigious certification recognizes our strength and capabilities,” commented Dr. Wo Hing Li, China Precision Steel’s Chairman and CEO. ”With further approval, by receiving these certifications, we will be able to take advantage of the provisions of the Science and Technology Ministry which will help us deploy our capital more effectively and expand our high-end product offerings.”

Shanghai Municipal Office for Converting Advanced New Technological Achievements into Productivity is involved in setting long-term science and technology development policies in Shanghai. The office has established an accrediting system for projects with the purpose of converting advanced new technological achievements into productivity. Companies are certified on the basis of technological grade, market prospects, risks and intellectual property of projects in Shanghai. Certification is valid for one year.

Several big iron ore contracts are set to expire at the end of this month. According to a recent Financial Times article, “Macquarie, the Australian bank, said Rio was committed to securing a price in excess of the 85-95 per cent the market is expecting. That stance suggests investors should be prepared for an extended and potentially hostile conclusion to the negotiations, it said in a report.” To add salt to the wound, according to this Forbes article, BHP Billiton has also been looking for a “freight premium to reflect the lower cost of shipping ore to China from their mines in Australia than from Brazilian mines.” I had to re-read that last sentence a couple of times. In short, BHP Billiton because it is closer to China (Australia vs. Brazil) wants to make sure that any potential savings the Chinese receive in freight is lost in material (resulting in more profits for BHP Billiton). But Vale, the Brazilian producer only received a 65% increase, according to the same article.

This news should come as no surprise. In fact, we covered it back in early April. Secretly I’m pleased to learn the Chinese aren’t just going to take this and instead, will likely postpone orders for as long as possible in retaliation against the iron ore producers who would then force the Chinese to buy off the [much more] expensive spot markets. The Forbes article quotes Lehman Brothers, “each 10 percent change in the iron ore contract price should result in a 9 percent change in Rio Tinto’s earnings and a 3.5 percent change in BHP Billiton’s earnings.”

I wonder what Lehman’s earnings analysis for Rio Tinto and BHP Billiton looks like when Chinese orders drop off for a quarter or more? Now that would be fun to watch!