China Steel Corp (中鋼), the nation’s only integrated steelmaker, has decided to raise its domestic steel product prices for the first time in six months to reflect rising raw material costs.
The Greater Kaohsiung-based company yesterday said it would increase prices for October and November contracts by an average of NT$379 per tonne, or 1.86 percent, it said in a statement.
“The higher costs [of raw materials] have lent support to higher steel prices in China and Taiwan,” China Steel vice president for sales Liu Jih-gang (劉季剛) said by telephone.
The average price for iron ore was 27 percent higher at US$140 per tonne this month from US$110 in early June, while the average price of coal rose 13.38 percent to US$161 per tonne from US$142 in late June, Liu said.
China Steel has seen rising orders as its downstream customers increase inventory in anticipation of a global economic recovery.
The company said economic conditions in Europe have shown signs of improvement, with economies in Japan, China and the US also growing.
“Another crucial reason for [China Steel’s decision] to increase prices is global steel prices have risen compared with a month ago,” said Steve Lee (李慶超), another China Steel vice president.
Lee added that several US steel companies are scheduled to shut down their furnaces for maintenance next quarter, which will reduce steel supply.
Lee said that revenues for next quarter would increase sequentially on the back of rising steel prices and orders.
Liu forecast a 1.04 percent increase in shipments to 2.9 million tonnes next quarter from 2.87 million tonnes this quarter.
Under the company’s latest price adjustments, prices for benchmark hot-rolled steel sheets and coils are set to rise by NT$708 per tonne, while those for cold-rolled steel sheets and coils, which are mainly used in the automobile industry, will increase by NT$523 per tonne.
Electro-galvanized steel sheet prices will rise by NT$600 per tonne, while those for electrical sheets, which are mainly used to manufacture home appliances, will increase by NT$510 per tonne.
Prices for hot-dipped, zinc-galvanized steel sheets will climb by NT$470 per tonne.
However, the company kept the prices of steel plates and steel bars and rods unchanged.
“Demand for steel plates is relatively weak, and we are keeping the prices of steel bars and rods unchanged to help our customers remain competitive,” Liu said.
China Steel shares dropped 0.39 percent to NT$25.30 yesterday, underperforming the TAIEX, which rose 1.32 percent.