China Steel Corp (CSC, 中鋼), the nation’s largest steelmaker, yesterday said it would raise domestic product prices by an average of 4.2 percent for deliveries in the second quarter to reflect an uptrend in global steel prices.
The 4.2 percent increase marks the third consecutive price hike by CSC after the company in November last year announced a 1.5 percent price increase for this quarter’s shipments, company data showed.
Based on the price adjustments, CSC would raise the prices for all products by an average of NT$914 per tonne for next quarter’s contracts.
The Kaohsiung-based steelmaker said in a statement that it would hike prices for benchmark hot-rolled sheets and coils by NT$912 per tonne, NT$621 per tonne for cold-rolled sheets and coils — which are widely used in the automotive industry — and NT$543 per tonne up for steel plates.
The company’s latest price hikes came after its global peers raised their product prices.
US steel mills have increased prices for hot-rolled steel products by more than US$66 per tonne, while Chinese steelmakers have boosted prices by between US$20 and US$30 per tonne after Beijing pledged to cut steel output by 3.5 million tonnes this year, CSC said.
A strong global economic recovery and relatively low inventory levels in major steel markets were two main reasons behind rising global steel prices, CSC said, citing an IMF report released last month that predicted the global economy would expand 3.9 percent this year, the fastest pace in seven years.
Global steel demand is forecast to grow by more than 1.5 percent this year, CSC said, citing statistics from ArcelorMittal SA, one of the world’s largest steel and mining companies.
Global steel supplies are expected to remain tight in the near term, as some Chinese manufacturers have been forced to halt production during winter, CSC said.
Due to the tightened supply, a broadening spread of hot-rolled steel products is expected to drive CSC’s earnings growth, Yuanta Securities Investment Consulting Co (元大投顧) said.
“The average hot-rolled steel price last year returned to the levels in 2013, but the average price of iron ore, steel’s major feedstock, was only half of the 2013 level,” Yuanta analyst Leo Lee (李侃奇) said in a client note on Monday.
The sentiment for the steel sector will remain positive in the first half of this year, given the stable steel price uptrend, Lee said.
CSC shares edged down 0.41 percent to close at NT$24.1 in Taipei trading yesterday before the price hike announcement.
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