Shanghai Baosteel Group Corp's fourth quarter price adjustments included larger-than-expected cuts for some critical flat steel products, Citigroup Investment Research said.

'Baosteel adjusted next quarter's listed prices by (minus) 4.2 to (plus) 10.5 pct quarter-on-quarter, compared to our forecast of a cut of zero pct and a rise of eight pct. We had forecast a three to five pct cut for hot rolled product and flat pricing for cold rolled, but cuts for both products were announced,' Citigroup said in the note to investors.

Baosteel said yesterday that fourth quarter prices for hot rolled steel will be cut to $468 per ton from $493 in the current quarter, while cold rolled product prices will fall to $575 from 600.

Thick plate steel prices will rise to $606 per ton from $594 currently, and galvanized sheet steel will increase 10.6 pct to $727 beginning Oct 1.

'The higher zinc price hike could be one contributing factor for galvanised price hike. On average, though, Baosteel's fourth quarter prices are still below those in the fourth quarter of 2005,' Citigroup added.

Rolled steel is used in auto, machinery and home appliance manufacturing, while thick plate is used primarily in shipbuilding.

Baosteel Group adjusts its benchmark steel prices for the domestic market quarterly.