Thu, Aug 28, 2014 - Page 13 News List

China Steel keeps October, November prices flat in bid to stay competitive

By Camaron Kao  /  Staff reporter

China Steel Corp (中鋼), the nation’s only integrated steelmaker, yesterday kept its domestic prices for October and November shipments unchanged compared with its September contracts, as steel exports from China increase.

“Steel exports from China are expected to reach 80 million tonnes this year, up from 50 million a year ago,” company vice president for sales Liu Jih-gang (劉季剛) said by telephone yesterday.

Despite the surge in Chinese exports, three of China’s major steel companies — Baosteel Group Corp (寶鋼), Wuhan Iron and Steel Corp (武漢鋼鐵) and Anshan Iron and Steel Group Corp (鞍鋼) — have only raised their prices by about 5 yuan (US$0.81) per tonne on average recently, allowing China Steel to keep its steel prices flat, Liu said.

In addition, Chine Steel’s clients have faced higher tariffs in Southeast Asian countries than their peers have, so the company has decided to keep its prices unchanged to help those customers remain competitive in the region.

The Taiwanese firm is encountering stiff competition from cheaper steel plates exported by its Chinese and Indonesian rivals, as well as low-priced cold-rolled sheets and coils from South Korean competitors.

Taiwan imported 270,000 tonnes of steel plates in the first half of the year, a figure that accounts for one-third of all steel plates sold in the country, China Steel said, adding that that portion market was higher than the one-fourth share recorded a year ago.

Imported cold-rolled sheets and coils grew by about 70 percent to 175,000 tonnes in the first seven months of this year, compared with the same period last year, the company said, adding that these imports accounted for 10 percent of all the cold-rolled sheets and coils sold in Taiwan last year.

China Steel said it would collect information of these inbound shipments to see if their importers have violated the Fair Trade Act (公平交易法).

The price of iron ore was also low, which enabled the company to not raise its prices for the industrial metal, Liu said.

Iron ore dropped to US$88 per tonne this month, down from US$95 per tonne a month earlier, he said.

China Steel aims to sell 3.15 million tonnes of steel next quarter, similar to the 3.16 million tonnes it moved this quarter, while bidding to have a utilization rate of close to 100 percent this quarter and then next, Liu added.

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