China Steel Corp (中鋼) will raise its domestic product prices by an average of 9.4 percent in September, an official at the nation’s largest and only integrated steel maker said yesterday.
“To follow the global trend, the company has decided to increase steel prices by an average of NT$1,710 (US$52.23) per tonne in September,” public relations official Hung Jui-bin (洪瑞彬) said by telephone.
The Kaohsiung-based company’s price hike follows on the heels of similar moves by China’s Baoshan Iron & Steel Co (Baosteel, 寶鋼) and Anshan Iron & Steel Group (鞍鋼) as well as South Korea’s Pohang Iron & Steel Co (POSCO).
It also marked the second increase for the company this year after it raised its prices for this month and next month by 7 percent.
The 9.4 percent hike was at the higher end of Macquarie Research Equities analysts’ forecast of a rise between 5 percent and 10 percent, according to a research note issued last Wednesday.
The price hike means that steel plates will cost NT$1,517 more per tonne, while bar and wire rod prices will increase NT$1,200 per tonne, China Steel said in a statement.
The price of hot-rolled and cold-rolled steel will increase by NT$1,800 and NT$1,588 per tonne respectively. Electro-galvanized coil wire and electrical coil wire will each cost NT$2,500 and NT$2,870 more per tonne, while hot-dip zinc-galvanized sheets will be up by NT$3,167 per tonne, the statement showed.
China Steel said domestic steel prices would have risen even more if it had used surging international prices as a gauge.
“Considering the domestic economy is just beginning to bottom out and the momentum of recovery remains weak, China Steel decided on a small price hike while helping ‘enhance the competitiveness of domestic downstream industries,’” the company said in the statement.
“The adjusted prices are still lower than the international prices,” it said.
China Steel posted a pretax profit last week of NT$774 million, or NT$0.06 per share, in the second quarter, compared with a pretax loss of NT$9.57 billion in the first three months and a profit of NT$23 billion a year earlier.
On June 19, chairman Chang Chia-chu (張家祝) told shareholders at the firm’s annual general meeting that the company expects to book a profit in the third quarter on rising demand.
He said the company might be profitable for the whole year, if earnings made in the fourth quarter are big enough to offset the first-quarter loss.
The company made a profit of NT$24.03 billion last year, down 53.13 percent from 2007, after incurring a fourth-quarter loss of NT$15.45 billion amid the global economic slowdown, company statistics showed.
China Steel’s shares closed 3.53 percent higher yesterday at NT$29.30. The stock has risen 26.84 percent so far this year, stock exchange data showed.
The benchmark TAIEX has risen 55.57 percent over the same period.