China Steel Corp (CSC, 中鋼), the nation’s largest steelmaker, yesterday said it would cut product prices by 4.8 percent per tonne on average for deliveries in January and February as the industry is facing the severest slump since the global financial crisis of 2008.
The decision to decrease prices comes after the company announced last month to keep its prices flattish for next month’s shipments.
“Demand is so fragile that we have to trim our shipment goal for the fourth quarter,” CSC vice president Liu Jih-gang (劉季剛) said by telephone yesterday.
The company has lowered its shipment target for the current quarter to 2.6 million tonnes, down 6.81 percent from an original estimate of 2.79 million tonnes, Liu said.
The company said demand fell short of its expectations on a flagging Chinese economy and persistent oversupply, while seasonal demand has not materialized.
“The fourth-quarter demand is deteriorating further from the third quarter unexpectedly, according to information from our customers,” Liu said.
“This downturn is even more severe than during the financial crisis. Most companies, including CSC, have swung into the red in the fourth quarter,” Liu said.
CSC posted its first monthly operating losses since 2012 for last month at NT$6 million and the company sees no sign for a quick end to the downturn.
“We had seen demand rejuvenate after the Chinese Lunar New Year holidays last year and the year before, but this year there seems to be no such recovery in sight,” Liu said.
The steelmaker aims to keep shipments unchanged at 2.6 million tonnes next quarter, Liu said.
CSC’s price cut of 4.8 percent is less than the 6.14 percent price reduction that it announced in July, buoyed by relatively better demand for heavy steel plates.
“Price decline in heavy steel plates is milder, thanks to relatively better demand from shipbuilding and public construction sectors. Heavy steel plates make up a major portion of our shipments,” Liu said.
The company lowered its prices for steel plate prices by NT$564 per tonne, while the price for benchmark hot-rolled sheets are to decrease by NT$859 per tonne, according to a company statement.
The price of electrical sheets used in the manufacture of home appliances is to fall by NT$870 per tonne, while those for steel bars and wire rods are to fall by NT$970 per tonne.
In addition, prices for electro-galvanized sheets and hot-dip galvanized and galvanic are to slide by NT$800 and NT$541 per tonne respectively.
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