Feng Hsin Steel Co (豐興鋼鐵) has raised its buying prices for rebar and scrap steel twice in a week.
The Taichung-based rebar maker on Monday announced that it would raise its prices by NT$300 per tonne for rebar products to NT$17,100, following an increase of NT$200 per tonne on Thursday last week, while raising its scrap buying prices by NT$300 per tonne to NT$8,700 after adding NT$200 the same day.
Overall, it has raised prices for rebar and scrap steel by between 3.01 and 6.25 percent.
“The price adjustments reflect the upward trend in the international steel prices” as demand grows and supply decreases, Feng Hsin spokesperson Cheng Te-yi (成德懿) told the Taipei Times by telephone yesterday.
The company uses electric arc furnaces to melt scrap steel and other material such as limestone, ferrosilicon and ferromanganese to make merchant bars, round bars and rebars for fasteners, auto parts, and for the mechanics and construction industries, it said.
This week, US container scrap steel prices rose by US$12 to US$285 per tonne, while Japanese prices rose by US$7 to US$305 per tonne and Australian iron ore increased US$3.25 to US$103.65 per tonne, Feng Hsin said.
The Central News Agency on Monday reported that after the US on May 17 reduced its special tariffs on Turkish steel products from 50 percent to 25 percent, the anticipated higher Turkish steel exports to the US have pushed up prices for scrap steel.
The collapse of a Brazilian mine dam in January could also impact the production and shipment of iron ore, which would increase the cost of making steel and therefore boost global steel prices, Cheng said.
Feng Hsin said it remains conservative about this year, but expects the high-margin rebar business to keep contributing to sales and profits.
The company also aims to develop special new products for downstream customers and decrease operating costs by utilizing new energy-saving equipment, it said.
Feng Hsin last quarter posted net income of NT$679.49 million (US$21.6 million), up 1.26 percent from NT$671.03 million the previous year.
Earnings per share slightly improved from NT$1.15 to NT$1.17, but gross margin decreased 2.86 percentage points to 11.06 percent.
First-quarter revenue grew 1.04 percent to NT$9.46 billion, from NT$9.36 billion a year earlier, on the back of price increases, the company said.
Feng Hsin shares yesterday closed down 2.52 percent at NT$62 in Taipei trading.
They have climbed 6.9 percent so far this year.
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