Metal Products News
- Shanghai News
Date: 22-May-2007 Sources: (Shenzhen Daily)
BAOSHAN Iron & Steel Co., China's biggest steelmaker, said yesterday it has improved stainless steel profitability this quarter compared with the first three months of the year by producing more nickel-free products.
'We have significant improvement in profit margins for stainless steel this quarter as we just started to make more nickel-free products while keeping existing production of normal grades,'' said Wang Chengxue, assistant to the president of Baoshan's stainless steel unit.
The nickel price has climbed sevenfold in the past five years, driving Baoshan and rival companies to make stainless steel with higher chromium and manganese contents, or without any nickel. Baoshan's total gross margin, the percentage of sales left after production costs, fell to 16.3 percent in the first quarter, the lowest in a year, as stainless steel profitability declined. The company did not break down separate product margins.
'If nickel prices stay at high levels for a longer time, more stainless steel consumers will be forced to try using non-nickel stainless steel, or use plastic or other materials,'' said Xu Aidong, an analyst at Beijing Antaike Information Development Co.
Baoshan will increase nickel-free production to boost its total output of stainless steel slab by 9.1 percent to 1.2 million tons this year from last year. The company opened a plant in 2005, giving it stainless steel capacity of 1.5 million tons.
Nickel for three-month delivery on the London Metal Exchange rose to a record high of US$51,800 a metric ton May 9.
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