Leading stainless steel producers in Taiwan yesterday reported substantially improved sales this month, kindling hopes that the market has at least touched bottom, if not yet started to rebound.
Yieh United Steel Corp (燁聯) in Kaohsiung County — the largest integrated stainless steel mill in Southeast Asia with an annual capacity of 1 million tonnes — indicated that thanks to rising international nickel prices, its stainless steel supply this month is expected to reach 70,000 tonnes.
The estimated volume for this month is a significant increase from the historical monthly lows of 40,000 tonnes in January and February and around 60,000 tonnes last month, the mill said.
Tang Eng Iron Works Co (唐榮) in Kaohsiung, a specialized producer of stainless steel with an annual capacity of 260,000 tonnes, also reported that its capacity utilization rate has increased from 20 percent in February to 80 percent this month, with total production this month estimated to triple to 24,000 tonnes from the monthly average of the first quarter.
Both Yieh United and Tang Eng hiked their stainless steel prices in the middle of the month, prompting a wave of price increases by downstream producers, including Yeun Chyang Industrial Co (允強), Froch Enterprise Co (彰源), Chien Shing Stainless Steel Co (千興), Yeou Yih Steel Co (有益), Sinkang Industries Co (新鋼), Ta Chen Stainless Pipe Co (大成) and Rodex Fasteners Corp (華祺).
Most producers said they believed that as long as nickel prices remain above US$10,000 per tonne next month and in June, their monthly revenues in the second quarter would continue to recover.
Stainless steel producers use about two-thirds of global nickel supplies, as the alloy contains up to 9 percent nickel, which accounts for about half of total stainless-steel production costs.
Nickel traded at an average price of US$9,686 per tonne in January on the London Metal Exchange and rose 15 percent to slightly above US$10,000 per tonne in February and the middle of last month before dipping below US$10,000 per tonne again late last month.
The prices soared again this month and broke US$12,000 per tonne a week ago, setting a new high for this year.
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