China Steel Corp (中鋼), the nation’s only integrated steelmaker, yesterday said it would cut domestic steel prices for June by an average of 2.08 percent, or NT$442 (US$14.84) per tonne — except for electrical sheets, steel bars and rods because of oversupply in China.
The price cuts ended three consecutive periods of increases. Prices were raised by 0.39 percent for January and February shipments, 3.08 percent for March shipments, and 3.81 percent for April and May shipments.
“Market conditions have changed rapidly in recent days, mostly due to oversupply in China,” China Steel vice president Liu Jih-gang (劉季剛) said by telephone.
Total steel output in China was 2.21 million tonnes per day in February, accounting for more than 50 percent of global steel production that month, the World Steel Association said.
Liu said total steel output in China last month declined slightly to 2.14 million tonnes per day.
“When they [Chinese steel mills] cannot sell all of their products, they cut prices,” Liu said.
China Steel also faced more severe competition from Japanese steelmakers because of the yen’s recent depreciation, the company said in a statement.
Furthermore, global economic conditions deteriorated, which affected China Steel’s local clients, Liu said.
On Tuesday, the IMF downgraded its global economic growth forecast from 3.5 percent to 3.3 percent.
Meanwhile, the company’s steel plate business suffered from severe competition at home.
Sales of lower-priced steel plates from South Korea, China, Japan and India pushed up the market share of imported products to 45 percent last quarter, the company said, adding that it was considering anti-dumping lawsuits.
Under the latest price adjustments, China Steel cut the prices for benchmark hot-rolled sheets and coils by NT$697 per tonne and lowered prices for cold-rolled sheets and coils, which are used mainly in the automobile industry, by NT$631 per tonne.
Prices for steel plates will be NT$438 less per tonne, while those for hot-dipped, zinc-galvanized sheets will drop by NT$533 per tonne and those for electro-galvanized sheets will be lowered by NT$500 per tonne.
Prices of steel bars, rods and electrical sheets, which are used to manufacture home appliances, will remained unchanged because of relatively stable demand, Liu said.