Steel industry to be unaffected by US tariff repeal

The nation's steel industry remains unaffected by Washington's decision to remove its steel import tariffs as its steel exports to the US are limited compared to its total outbound shipments, a spokesman for an assets management company said Friday.

Tsai Wan-ta (蔡萬達), general manager of ABN-AMRO Assets Management Taiwan (荷銀投信), said Taiwan's steel exports to the US only account for 5 percent, or some 272,100 tonnes, of the country's overall outbound shipments and that the US decision will have only limited benefits for the domestic industry.

US President George W. Bush scrapped the controversial steel import tariffs, imposed in March last year, to avert a possible trade war. Removing the tariffs could lead China and the EU to follow suit, opening up a larger market for steelmakers.

According to Tsai, the China Steel Corp (中鋼) -- Taiwan's largest steel mill -- produces between 9.07 million tonnes and 10.884 million tonnes each year.

Taiwan's steel stocks are worthy of investment in the long term because US steel output might fall amid stronger international competition. However, this "indirect" positive effect will not become apparent in the short term, Tsai said.

The analyst also said Taiwan's steel stocks are good targets worthy of investment for the time being,as operations and profits of domestic steelmakers such as China Steel and Tung Ho Steel Enterprise Corp (東鋼) are forecast to continue growing next year as a result of robust demand from China.

The earnings per share of domestic steel stocks are relatively low at present, he added.

Both China Steel and Tung Ho Steel shares unchanged at NT$27.3 and NT$12.15 on the TAIEX.

China, Brazil, the EU, Japan, New Zealand, South Korea, Switzerland and Norway filed a compliant against the US with the WTO in June the same year.