China Steel Corp (CSC, 中鋼), the nation’s only integrated steelmaker, yesterday raised steel prices by 12.6 percent for deliveries in the first quarter of next year, due to soaring international steel prices.
“Undersupply problems in the global steel market remain, which has stimulated raw material prices,” CSC president Liu Jih-gang (劉季剛) said by telephone, attributing the shortage of steel to Beijing’s measures to curb production.
The company’s global rivals, including the US and China, have increased prices in response to rising prices for raw materials, he said.
Steel mills in the US have raised prices for steel plates by US$110 per tonne since the end of last month, CSC said in a statement.
China’s major steelmakers, including Baoshan Iron & Steel Co (寶鋼), raised prices by nearly 450 yuan (US$65) per tonne for hot-rolled items to be delivered next month.
In addition, CSC said its raw material costs in the first quarter of next year would increase by more than US$150 per tonne from the third quarter of this year.
Given the rising costs, the company is to increase prices by NT$2,265 per tonne for shipments due in the first quarter, with a shipment target of 3.27 million tonnes, Liu said.
Among CSC’s major products, the price of hot-rolled items is to increase by NT$2,265 per tonne, while hot-dipped galvanized steel is to go up by NT$1,909 per tonne.
However, the prices do not fully reflect the increases in raw material prices, as the company hopes to sustain downstream customers’ global competitiveness, Liu told the Taipei Times.
“For example, prices for steel plates will only increase by NT$1,711 per tonne, as CSC decided to absorb nearly 40 percent of material costs,” Liu said, adding that local steelmakers are facing harsh competition in steel plate-related markets.
Alongside higher product prices, CSC’s sales might benefit from an anti-dumping tax on steel imports.
The Ministry of Finance said that it will levy anti-dumping duties ranging from 4.22 percent to 77.3 percent on zinc-coated steel products from China and South Korea for the next five years.
The government is also to impose anti-dumping taxes ranging from 4.02 percent to 80.5 percent on steel plates imported from six countries: China, South Korea, India, Indonesia, Brazil and Ukraine.
Asked about possible effects from punitive tariffs on imports, Liu said that the measures would curb unreasonably low prices for steel imports.
CSC reported pretax profit of NT$2.39 billion (US$74.8 million) last month, compared with last year’s NT$109 million, with accumulated pretax profit in the first 10 months rising 58.7 percent year-on-year to NT$19.06 billion on the back of increasing shipments and soaring steel prices since the third quarter, the firm said.
CSC shares yesterday gained 1.62 percent to close at NT$25.1 before the announcement of the new prices, outperforming the benchmark TAIEX, which increased 0.08 percent to 9,159.07 points.
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