Steel glut fears ease on Baosteel price rise
24 February 2006
Baosteel, China's largest steel company, said on Thursday it would raise prices on its main products by more than 10% in the second quarter, the Financial Times reported. The announcement has eased concerns of a recent glut in steel production continuing in 2006, which could lead to falling prices and repercussions for the whole of the global steel industry. Baosteel cut prices twice last year due to rapid expansion in production capacity in China, but some analysts predict this reversal could be short-lived because many Chinese steel makers were still expanding production because they feared government measures to close down small producers.