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China Steel planning to raise prices in third quarter

China Steel Corp (中鋼), the nation's biggest steelmaker, said it will increase the domestic prices of its products in the third quarter to reflect higher global prices caused by expanding economies and a shortage of raw materials.

The Kaohsiung-based company plans to boost prices for seven types of products, with the increases ranging from NT$800 (US$24) a tonne to NT$1,220 a tonne, the company said in an e-mailed statement, without giving either current prices or the percentage increases.

China Steel is raising prices even after China, the world's biggest steel user, took steps to cool its economy. China Steel raised prices every quarter since the second quarter of 2002 as Chinese demand drove prices of the metal. China Steel sells more than one-third of its exports to China. The company gets about a quarter of its sales from overseas markets.

The price of hot-rolled steel, used for pipes and containers, will rise by an average NT$800 a tonne, China Steel said. Cold-rolled steel, used in auto frames and home appliances, will rise NT$840 a tonne and the price of hot-dip galvanized coils, used in car parts and computer cases, will increase by NT$1,220 a tonne.

China Steel shares rose 1 percent to NT$30.10 on the TAIEX yesterday.

The company's profit may exceed its forecast as a recovery at home and abroad boost sales, even after China, the world's biggest steel user, took steps to cool its economy, the company said last week.

Taiwan's largest steelmaker is "optimistic" about its profit forecast and room for further price increases to bring its prices in line with the international market, said China Steel executive vice president Chen Yuan-cheng (陳源成).

China Steel in December forecast net income at NT$32.9 billion (US$991 million) for this year, against its profit last year of NT$37 billion.
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