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Export of steel products banned

A construction worker looks at a pile of steel rods at a construction site in Taipei City yesterday. PHOTO: WANG MIN-WEI, TAIPEI TIMES

Amid soaring international steel prices, the Ministry of Economic Affairs said yesterday that, starting on March 5, it would prohibit the export of locally produced steel reinforcement bars and billet for a period of three months to counter recent domestic undersupply.

The ministry will also closely monitor the domestic demand and supply of scrap steel and H-beam steel before deciding on whether to ban their export as well.

"However, no restrictions will be placed on steel imports as Taiwan is an open market and steel prices should be in line with international prices," Minister of Economic Affairs Steve Chen (陳瑞隆) told reporters yesterday.

"The Ministry will ask the state-owned China Steel Corp [中鋼] to set its prices lower than the international prices and to prioritize the supply to the domestic market," Chen said.

But Wu Sheng-feng (吳聖峰), chief executive of the Taiwan Steel and Iron Industries Association (台灣區鋼鐵公會), said yesterday he doubted the ministry's new policy would have any impact, as the sector's real problem lies in rising international steel prices rather than a domestic steel shortage.

"Soaring steel prices are an international phenomenon, which is something Taiwan can't buck," Wu said, adding that it had become impossible for domestic contractors to buy cheap steel.

Local contractors that had bid for government infrastructure construction are those who have been the most affected by rising prices, Wu said.

"The government should reimburse construction contractors for the difference in steel price rather than asking contractors to absorb the costs themselves," Wu said.

Rising steel prices have already driven up construction costs, which will result in higher property prices, land developers said.

The cost for buildings under construction rose NT$6,000 per ping in the past week, said Lai Cheng-i (賴正鎰), chairman of the Taichung-based construction company Shining Group (鄉林集團).

Lai said that steel prices had risen 44 percent from NT$18,000 (US$568) per tonne to NT$26,000 in the second half of last year, but had gone up NT$4,000 this past week.

The steel price is likely to reach more than NT$30,000 per tonne next week, which would bring up home prices by a minimum of 5 percent, he said.

Lai urged the government to launch an investigation to determine if steelmakers and suppliers have unfairly inflated prices.

The supply shortage of steel in the local market has also worried developers.

Since Shining needs at least 100,000 tonnes of steel this year for its NT$35 billion projects, the company has been forced to place orders with as many steelmakers as possible, since each of them can only provide 2 tonnes of steel per month, another company executive said yesterday.
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