Fri, May 26, 2006 - Page 11 News List

China Steel hikes prices for Q3

RISING DEMANDThe price of seven products is set to rise by an average 10.8 percent as the nation’s biggest steelmaker enjoys a jump in demand. A KGI Securities analyst said that the third quarter has been the best for the firm this year, and that the hikes were sensible

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China Steel Corp (中鋼), Taiwan’s largest steelmaker, said it would raise the prices of seven products in the third quarter because of rising demand.

The prices would be increased an average of 10.8 percent in the three months beginning July, Chung Lo-min (鍾樂民), executive vice president of the company, said yesterday in an interview by telephone from Kaohsiung, where the company is based.

“Demand is quite good across the board, and costs are higher,”he said.

China Steel agreed to pay 19 percent more for iron ore, a principal raw material, to Companhia Vale do Rio Doce, the Brazilian company said yesterday.

The steel market in China, which buys about 10 percent of the Taiwanese steelmakers’ products, is recovering after prices fell 31 percent last year.

Customers in Taiwan are also buying more of the metal for construction and manufacturing.

“The third quarter seems to be the best period for the company this year,” said Shawn Wang, an analyst at KGI Securities Co (中信證券), who has a recommendation of “reduce” on the stock.

China Steel’s price revision “is in line with market expectations,” he said.

Baoshan Iron & Steel Co (寶鋼), China’s largest steelmaker, said on Tuesday it will raise product prices by as much as 13 percent in the third quarter as demand recovers. Rising raw material costs have also prompted steelmakers to charge customers more.

The Taiwan steelmaker raised prices for hot-rolled steel by an average NT$2,230 (US$69) a tonne, those for bar-and-wire rods by NT$1,810, and those for hot-dip zinc-galvanized sheets by NT$1690, it said in a statement.

Prices of steel plates will rise by NT$1,380 and those for cold-rolled steel by NT$1,050, while those of electro-galvanized sheets and electrical sheets will increase by NT$500.

Hot-rolled steel is used to make cold-rolled steel. Cold-rolled steel and zinc-galvanized sheets are used to make car bodies and home appliances.

Chung said the company was “quite restrained” in raising its prices, compared with other steelmakers. He didn’t elaborate.

While he said he hoped the third quarter would be “smooth,” Chung said it was too early to predict how the company will do in the fourth quarter. “Conditions are not that clear.”

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