Chung Hung Steel raising domestic prices once again

By Camaron Kao  /  Staff reporter

Wed, Jan 29, 2014 - Page 14

Chung Hung Steel Corp (中鴻鋼鐵), a subsidiary of China Steel Corp (CSC, 中鋼), on Monday said it plans to increase domestic prices for next month’s shipments by NT$300 (US$9.89) per tonne as the market sentiment in the sector has improved.

The increase would mark the second consecutive month of price hikes for the company’s hot-rolled sheets and cold rolled coils, Chung Hung vice president Wang Chao-cheng (王朝成) said by telephone.

“The positive market sentiment is a reflection of lower steel output in China, where serious smog problems and the government’s focus on structural reforms instead of GDP growth have curbed steel mills’ production,” Wang said.

As a result, Chinese steel companies have no spare capacity to sell in Southeast Asia at lower prices, he said.

Although prices for raw materials such as coal and iron ores are currently on the decline, global steel demand is likely to increase after the weather in the US and Europe turns warmer, Wang said.

Therefore, the company expects positive market sentiment will likely last until the end of the second quarter, he added.

Chung Hung expects its shipments to exceed 170,000 tonnes per month this quarter, compared with 140,000 tonnes last month.

The lower shipments last month caused the company to report revenue of NT$2.62 billion for last month, down 7.09 percent month-on-month and 36.86 percent year-on-year, according to the company’s filing to the Taiwan Stock Exchange.