China Steel Corp (CSC, 中鋼) is raising steel prices for September delivery by an average of 1.49 percent month-on-month as COVID-19 economic stimulus packages and reopening markets boost demand worldwide.
The price hikes from the nation’s biggest steelmaker came on the heels of a US$20 per tonne increase from its Japanese peers for steel exports and a US$25 per tonne increase from South Korean makers for the local market, CSC said in a statement on Friday last week.
In China, the recovering automotive market and new infrastructure construction projects have raised steel prices to high levels, CSC said.
Photo: Tyrone Siu / Reuters
To accelerate economic recovery, Beijing plans to invest 1.2 trillion yuan (US$171.62 billion) on public infrastructure projects, which would spur demand for steel, the company said.
Flood reconstruction efforts in China have also stimulated steel demand, it said.
“It is clear that the global economy is moving in a positive direction, as the purchasing managers’ indices in Europe, the US, Japan, South Korea, Southeast Asia and Taiwan have all trended up after they started reopening businesses in June,” CSC said.
“Demand for steel is growing,” the company added.
CSC said that global iron ore prices have been hovering at high levels, pushing up manufacturing costs for steelmakers.
The uptrend in iron ore prices is an indicator that the world’s steel industry is recovering, it added.
The Kaohsiung-based steelmaker said it only raised prices mildly, with an aim to divert the risk of order decreases as customers tend to buy more steel overseas when the New Taiwan dollar appreciates against the US dollar, which cuts importers’ purchasing costs.
Over the past month, the NT dollar has risen 0.59 percent to NT$29.593 against the US dollar as of Friday last week, from NT$29.77 on June 15, central bank data showed.
Based on the latest adjustments, prices of hot-rolled steel and cold-rolled steel are to increase NT$300 per tonne, marking the third straight month of price hikes, CSC said.
Hot-rolled and cold-rolled steel are used in auto manufacturing and building construction.
The NT$300 price increase also applies to hot-rolled steel slabs and hot-dipped, zinc-galvanized sheets, which are used in the production of consumer electronics and other high-tech devices such as PCs, the company said.
The price for electro-galvanized sheets is to rise by NT$500 per tonne, the biggest hike among CSC’s steel products.
Over the past seven months, the company has struggled to eke out profits due to slumping prices and shrinking demand.
It posted pretax losses of NT$534.99 million (US$18.08 million) for May, greater than April’s pretax losses of NT$493.16 million.
CSC last month told shareholders that it aimed to return to the black by the end of this year.
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