With the global economic growth momentum weakening and headwinds rising for domestic consumption because of energy price hikes, China Steel Corp (CSC, 中鋼) yesterday said it was keeping domestic steel prices for July-August delivery mostly flat from next month’s levels.
The announcement follows its decision on April 20 to keep steel prices for delivery next month unchanged because demand from downstream customers remained lukewarm. Analysts said they did not expect substantial price hikes in the near term.
China Steel, the nation’s largest and only integrated steelmaker, said in an e-mailed statement that it would not adjust July-August prices for five types of products — steel plates, steel bars and rods, hot-rolled sheets and coils, electro-galvanized sheets and electrical sheets — to help domestic customers maintain their international competitiveness.
PRICE CUTS
However, prices for cold-rolled sheets and coils and for hot-dipped, zinc-galvanized sheets and coils used for automobiles will be reduced by about NT$450 per tonne from next month’s levels, the Greater Kaohsiung-based company said.
“While Taiwan’s economy is expected to improve gradually in the second half, we decided to keep most prices unchanged after taking into account the potential impact of global political and economic uncertainties, as well as domestic fuel and power price increases, on downstream customers,” China Steel said in the statement.
Ahead of the company’s price announcement, Citigroup Global Markets predicted the Taiwanese manufacturer would keep prices for its benchmark hot-rolled coils unchanged at NT$20,300 per tonne to match current domestic spot quotes.
Tsai Yen-ling (蔡燕鈴), an analyst at Grand Cathay Investment Services Corp (大華投顧), said China Steel’s announcement was in line with her expectations.
The brokerage added that the odds of China Steel introducing substantial price hikes in the near term were rather low because market prospects for the second half remained uncleared.
"The company's latest move is mainly to restore and maintain market confidence," Tsai said.
So far this year, China Steel has not been able to raise domestic prices significantly because of global economic conditions.
In February, the company increased prices for delivery last month and this month by an average of 1.11 percent, after it kept prices unchanged for March and lowered January-February prices by an average of 7.08 percent per tonne, company data showed.
PROFIT DOWNGRADE
Tsai adjusted downward her profit forecast for China Steel this year. She expects the company's net income to reach NT$12.19 billion, or earnings per share of NT$0.81, down 37.5 percent from last year’s profit of NT$19.5 billion, or earnings per share of NT$1.45. Revenue is expected to reach NT$226.8 billion, down 5.6 percent from last year, she said in a research note.
GEOPOLITICAL ISSUES? The economics ministry said that political factors should not affect supply chains linking global satellite firms and Taiwanese manufacturers Elon Musk’s Space Exploration Technologies Corp (SpaceX) asked Taiwanese suppliers to transfer manufacturing out of Taiwan, leading to some relocating portions of their supply chain, according to sources employed by and close to the equipment makers and corporate documents. A source at a company that is one of the numerous subcontractors that provide components for SpaceX’s Starlink satellite Internet products said that SpaceX asked their manufacturers to produce outside of Taiwan because of geopolitical risks, pushing at least one to move production to Vietnam. A second source who collaborates with Taiwanese satellite component makers in the nation said that suppliers were directly
Top Taiwanese officials yesterday moved to ease concern about the potential fallout of Donald Trump’s return to the White House, making a case that the technology restrictions promised by the former US president against China would outweigh the risks to the island. The prospect of Trump’s victory in this week’s election is a worry for Taipei given the Republican nominee in the past cast doubt over the US commitment to defend it from Beijing. But other policies championed by Trump toward China hold some appeal for Taiwan. National Development Council Minister Paul Liu (劉鏡清) described the proposed technology curbs as potentially having
EXPORT CONTROLS: US lawmakers have grown more concerned that the US Department of Commerce might not be aggressively enforcing its chip restrictions The US on Friday said it imposed a US$500,000 penalty on New York-based GlobalFoundries Inc, the world’s third-largest contract chipmaker, for shipping chips without authorization to an affiliate of blacklisted Chinese chipmaker Semiconductor Manufacturing International Corp (SMIC, 中芯). The US Department of Commerce in a statement said GlobalFoundries sent 74 shipments worth US$17.1 million to SJ Semiconductor Corp (盛合晶微半導體), an affiliate of SMIC, without seeking a license. Both SMIC and SJ Semiconductor were added to the department’s trade restriction Entity List in 2020 over SMIC’s alleged ties to the Chinese military-industrial complex. SMIC has denied wrongdoing. Exports to firms on the list
TALENT FACTOR: The nation’s chip sector would be difficult to replace, but to maintain that advantage, Taiwan must retain skilled workers, an academic said A group of experts on Sunday called on Taiwan to strive to maintain its world-leading position in the semiconductor industry, with a US-China chip dispute expected to continue regardless of who becomes the next US president. Tamkang University Graduate Institute of International Affairs and Strategic Studies director Li Da-jung (李大中) said at a Taipei seminar on global semiconductor security that the relationship between the two superpowers would remain confrontational. There appears to be “no turning back” in US-China relations, as US presidential candidates US Vice President Kamala Harris and former US president Donald Trump are both expected to continue Washington’s hawkish stance