China Steel Corp (中鋼), the nation’s biggest steelmaker, yesterday said it would cut domestic steel prices for September delivery by an average of NT$1,020 (US$31.58), or 4 percent, amid softening demand. The cuts end four consecutive price hikes since March.
The Kaohsiung-based company said it would offer domestic customers “retroactive rebates,” meaning the discount would cover purchases made in July and August.
The company’s latest price cuts were in line with JPMorgan Securities analyst Nick Lai’s (賴以哲) forecast on Monday of a drop of between 4 and 5 percent, a move that is expected to provide incentives to customers to fulfill orders and enhance their price competitiveness.
“Worries that Europe’s debt woes may push it into a double dip recession have placed steel prices under correction pressure in the US and Europe, while prices in China have fallen continuously due to China’s adjustment of macroeconomic policies and persistent oversupply in the steel industry,” China Steel said in a statement.
Hours after China Steel’s price cuts announcement, Baoshan Iron & Steel Co (寶鋼), China’s largest steelmaker, said it was cutting prices for some of its hot-rolled and cold-rolled products by 300 yuan (US$44) per tonne for August delivery, according to a company statement posted on the Chinese-language Web site Bsteel.com.cn (東方鋼鐵在線).
In China Steel’s statement, the company said some of its downstream customers had recently seen lower orders for cold-rolled sheets and coils as well as hot-dipped, zinc-galvanized sheets because of low-priced competition from Chinese steel exports following Beijing’s efforts to rein in soaring housing prices.
JPMorgan analyst Nathan Zibilich forecast that steel prices in China could see a further 10 percent decline in the remaining months of the year due to high inventory and poor demand.
Meanwhile, Citigroup Global Markets analysts Peter Kurz and Timothy Chen on Monday forecast that Chinese steel production would continue to fall over the next three months to help stabilize prices.
Under the latest adjustments, China Steel said prices for benchmark hot-rolled sheets and coils would fall by NT$1,800 per tonne, or 7.06 percent, for September shipment. That adjustment was lower than Citigroup’s estimate of a fall of US$60 (NT$1,930) per tonne.
Prices for cold-rolled sheets and coils will drop by NT$1,200 per tonne, while those for electro-galvanized sheets and hot-dipped, zinc-galvanized sheets will be cut by NT$1,200 and NT$2,528 per tonne respectively.
Prices for steel plates, steel bars, wire rods and electrical sheets will remain unchanged, according to the statement.
In related news, China Steel said a fire at its No. 1 furnace in Kaohsiung, which broke out at 12:45pm yesterday, was put out in 30 minutes. No one was injured, it said.
The company said it would take two days to resume production. It did not provide an estimate of potential losses.
Shares of China Steel fell 0.33 percent to NT$30.35 yesterday before the announcement of the price cuts, compared with a 0.55 percent decline in the TAIEX.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to