China Steel Corp (中鋼), the nation’s largest steelmaker, yesterday lowered its domestic steel prices by an average of 14.03 percent, or NT$3,353 (US$96.85) per tonne, moving closer to market pricing levels.
The Kaohsiung-based steelmaker said that the price cuts would only apply to April and May; prices for June would be determined separately. The cut will be retroactive to the first quarter, its press release said.
The price cuts per tonne are as follows: electrical steel coil, NT$4,500; steel plate, NT$4,166; electro-galvanized coil, NT$4,000; wire rod, NT$3,500; hot-rolled steel, NT$3,000; cold-rolled steel, NT$2,961; and hot-dipped galvanized steel coil, NT$2,869.
This was the first time for the firm, which usually announces prices on a quarterly basis, to adjust them on a bimonthly basis. The steelmaker attributed its decision to an expected rise in demand for steel products thanks to various economic stimulus packages worldwide, while major steel factories have been implementing large-scale output cuts in a bid to tighten supplies.
The combined effect of both factors could speed up the process of reaching a balance between supply and demand of steel products, it said.
China Steel also said it had advanced the date of maintenance for its No. 3 blast furnace to the middle of April. Production will not resume until early September at the earliest.
Output volume during this period is projected to fall between 40 percent and 45 percent below capacity, the statement said.
“China Steel’s price cuts were higher than my estimate of a cut of NT$2,000 for the second quarter and another NT$1,000 for the third quarter,” Angela Chuang (莊慧君), an analyst who tracks steel stocks at Capital Securities Corp (群益證券), said by telephone yesterday.
Chuang said China Steel’s move would enable it to “get out of bad situations sooner” and projected that its profit would improve on a quarterly basis this year.
Chuang maintained her target price of NT$25 for China Steel.
Shares of China Steel fell 0.43 percent to NT$23 yesterday, outperforming the benchmark TAIEX’s 2.17 percent drop.
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