Baosteel Leaves November Prices Unchanged From October

* Baosteel leaves November prices unchanged from October * Other major steel mills remain wary of demand SHANGHAI, Oct 11 (Reuters) - An unexpected price freeze by a top Chinese steel mill signals that other players in the world's biggest steel sector are likely to show similar caution for the rest of this year as oversupply continues to dog the market, analysts said on Monday. China's largest listed steelmaker, Baoshan Iron & Steel, which traditionally sets the tone for monthly price changes, said on Monday it would keep November prices for key steel products unchanged from October. Its major peers such as Wuhan Steel and Angang are expected to follow Baosteel's lead, keeping price rises to a minimum or eliminating them entirely. Baoshan, or Baosteel, said it would maintain prices for hot-rolled coil and cold-rolled coil unchanged from October after it had raised prices by up to 8 percent. The move was unexpected as spot prices were rising after China returned from a week-long national holiday. "I can't understand why the company made such a decision as the domestic market looks good at the moment, " said Du Hui, analyst with Qilu Securities. "It might still be concerned about the demand outlook for steel for the rest of this year. " Although the benchmark prices remained the same, Baosteel did say it would raise hot-dipped galvanised coil prices by 150 yuan ($22.49) per tonne and keep offering incentives for some other products. "I am still positive for steel prices in more than one year, and Baosteel should have had some room to raise its November prices, " said Zhang Shibao, an analyst with China Merchants Securities. CAUTIOUS SENTIMENT Other major steel mills are expected to announce new prices in coming days. The benchmark contract for rebar futures at the Shanghai Futures Exchange SRBc5 closed at 4, 510 yuan per tonne on Monday, its highest since Sept. 13 and 2 percent up from the previous close. Baosteel had cut its benchmark prices for July and August before raising them for October, seen as an aggressive move that signalled confidence in the country's steel demand, despite a slew of official moves to dampen property prices, which could weaken consumption in the construction sector. Some analysts suggested that the earlier increase had forced the company to tread lightly before foisting further hikes on the market. "Traditionally demand would fall in the winter season, and traders are facing tighter credit, which usually causes steel prices to stay weak, " said a senior official from Anshan Steel, the parent of Angang. "We might follow with cautious moves toward adjusting prices as we believe the Chinese steel market will continue to be oversupplied due to faltering exports and resuming output, " the Anshan official said. Chinese steel output has been trimmed in recent months by a government drive to improve energy efficiency, but a huge overhang of surplus capacity remains, ready to restart if prices pick up. The domestic market also added supply after the government withdrew tax rebates for some steel products exports in mid-July, a move that slashed Chinese shipments of steel overseas. Some market participants said production had resumed at several steel mills, including in the production hub of Hebei province, which had been shut to help China meet its energy efficiency target. Source: Reuters