Baoshan Iron & Steel Company has lowered product prices for a second straight month, signalling a lack of confidence in near term demand.

It cut hot rolled steel prices for June delivery by CNY 80 per tonne and cold rolled steel prices by CNY 100 per tonne.

Mr Wang Hetao analyst of Changjiang Securities said that “The moves may indicate expectations of weaker demand from the company’s primary customers in the automobile and home appliances sectors. It doesn’t reflect seasonal factors because Baosteel has lowered prices for June only twice since 2006.”

Shanghai based Baosteel is China’s largest listed steel company and its pricing policy typically serves as a benchmark for the rest of the industry in China. It supplies about half of the nation’s auto sheet market.

Mr Wang said that the latest price cuts may help Baosteel narrow its premium over market prices. Still, Baosteel may realize a monthly profit increase in June because the drop in raw materials prices is even wider.