Thu, May 08, 2008 - Page 11 News List

Ministry asks China Steel to pitch in

STAFF WRITER, WITH CNA

The Ministry of Economic Affairs (MOEA) will request that China Steel Corp (中鋼) give priority to local customers to keep soaring domestic steel prices under control, the ministry said yesterday.

“The MOEA will deal with the issue with measures that include reducing China Steel’s exports and have it prioritize the local market instead of foreign markets,” said Deputy Minister of Economic Affairs Shih Yen-shiang (施顏祥) at a legislative hearing.

China Steel exports about 20 percent of its annual production volume. Shih said the ministry would urge the company to shift production destined for export to meet local demand, half of which is still satisfied by imports.

Local builders have complained to the ministry over surging steel prices, citing rebar prices that have risen by 50 percent to NT$24,000 (US$786) per tonne since last year, Shih said.

“Prices have jumped due to rising global demand for steel resulting from booming construction around the world,” he explained.

Shih said exports of rebar had been prohibited in order to increase supply in the domestic market, but steel plate exports would still be allowed.

The formerly state-owned China Steel, Taiwan’s largest steel company, was privatized in 1995, but the MOEA still holds 22.45 percent of the company’s shares and seats on its board of directors to retain a degree of control over the company.

China Steel’s net income grew 30 percent year on year to NT$51.26 billion last year, thanks in part to rising international demand. With no sign of demand for steel weakening, the company plans to invest NT$200 billion through 2011 to expand its manufacturing capacity to 20 million tonnes.

“The investment will include two new steel mills to boost production to help tackle potential supply shortages, while increasing the company’s competitiveness in the international steel industry,” Shih said.

The Kaohsiung-based company also reported yesterday that its sales rose 24.74 percent year-on-year to NT$20.43 billion, the second highest monthly sales figure on record.

But last month’s sales figure fell by 0.09 percent from NT$20.45 billion in the previous month, China Steel said in a filing to the Taiwan Stock Exchange.

In the first four months of the year, sales rose 18.74 percent year-on-year to NT$77.78 billion, the filing showed.

Output totaled 772,192 tonnes last month, down 12.77 percent from March, it showed.

ADDITIONAL REPORTING BY KEVIN CHEN

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