China Steel Corp (CSC, 中鋼), the nation’s only integrated steel maker, yesterday cut its domestic prices for December shipments by 3.27 percent, or NT$646 (US$21.27) per tonne, on average compared with contract prices for this month and next month amid declining steel prices worldwide.
Although exports account for only 36 percent of its total production, China Steel has to follow global trends to ensure that its downstream clients can compete with their peers overseas, the company said in a statement.
“We are not likely to maintain high prices when global steel prices are under correction,” company vice president for sales Liu Jih-gang (劉季剛) told the Taipei Times by telephone yesterday.
Steel prices in the US recently fell from their peak levels and those in Europe remain at low levels because of its stagnant economic growth, China Steel said in the statement.
In China, major steel mills like Baosteel Group Corp (寶鋼) and Anshan Iron and Steel Group Corp (鞍鋼) recently also cut their prices for steel plates by 100 yuan (US$16.29) per tonne, although Wuhan Iron and Steel Corp (武漢鋼鐵) managed to keep its prices unchanged, Liu said.
Steel prices in China Steel’s export destinations, such as Vietnam and other Southeast Asian countries, also dropped, he said.
Liu said the fall in steel prices also reflected declining raw material costs, especially for iron ore.
Iron ore price is currently about US$83 per tonne, he said.
The price hit US$80 per tonne, the lowest point in the past five years, at the end of last month, he added.
For this quarter, China Steel reiterated its sales forecast of between 3.1 million tonnes and 3.15 million tonnes, similar to 3.16 tonnes in the past quarter.
Under the company’s latest price adjustments, the price of cold-rolled sheets and coils, which are used mainly in the automobile industry, would drop by NT$829 per tonne, while the price for steel plates is to drop by NT$861 per tonne.
“We face strong competition from cheap steel plate imports in Taiwan, and we want to stimulate demand for cold-rolled sheets and coils,” Liu said.
Prices for benchmark hot-rolled sheets and coils, electrical sheets, which are used to manufacture home appliances, hot-dipped zinc-galvanized sheets, steel bars and rods, and electro-galvanized sheets are to decline by NT$600 per tonne, according to China Steel.
The company said steel prices are not likely to drop further, as demand increases and price for iron ore bottoms out.
Citing the World Steel Association, China Steel said global steel demand next year would rise by 2 percent from this year to 1.59 billion tonnes.
From January through last month, the company reported revenue of NT$276.85 billion (US$9.11 billion), up 6.31 percent from NT$260.42 billion the previous year, according to a company filing to the Taiwan Stock Exchange.
China Steel shares dropped 2.14 percent to NT$25.2 yesterday, underperforming the TAIEX, which was down 1.4 percent.
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