China Steel Corp (CSC, 中鋼), the nation’s largest steelmaker, yesterday raised domestic steel prices for delivery next quarter by an average of 6.1 percent, the steepest increase in more than three years, as global economic recovery boosts demand.
Prices are to increase across the board by NT$1,200 (US$42.19) or NT$1,500 per tonne, depending on the product, from this quarter, the company said in a statement, adding that it expects the uptrend to continue in the near term, given severe supply constraints worldwide.
The global steel industry is seeing a V-shaped recovery in the fourth quarter, as a stronger-than-expected rebound in the housing and auto industries is propelling the price of steel products and iron ore — the raw material used to make steel — the Kaohsiung-based steelmaker said.
Photo: Lin Ching-hua, Taipei Times
“Supply has become significantly lower than demand due to strong demand to replenish inventories and customer requests for earlier deliveries worldwide,” the company said.
The rebound is a stark contrast to the first half of this year, when the COVID-19 pandemic stalled business activity and shut down most steel mills.
The latest price hike is a response to rising manufacturing costs, China Steel said, adding that iron ore prices have soared to a seven-year high of US$158 per tonne, significantly increasing manufacturing costs.
Coal prices are also on the rise, it added.
The price adjustments match a pricing strategy adopted by Chinese peer Baoshan Iron & Steel Co (寶鋼), which raised its prices for hot-rolled steel for delivery next month by US$61 per tonne, China Steel said in the statement.
Baoshan increased its prices for other products at a steeper rate, by US$77 to US$123 per tonne, it added.
Formosa Ha Tinh Steel Corp (河靜鋼) in Vietnam is also expected to raise its prices significantly, to reflect higher manufacturing costs and the market uptrend, China Steel said.
There have been drastic increases globally in the price of hot-rolled steel — US$1,000 per tonne in the US, US$700 per tonne in Europe and US$650 per tonne in Asia — it said.
China Steel has increased the price of hot-rolled steel sheets and hot-rolled steel coils for delivery next quarter by NT$1,500 per tonne.
The company reported that pretax profit last month increased about 75 percent to NT$2.36 billion from NT$1.35 billion in October.
During the first 11 months of this year, pretax profit plunged 98 percent to NT$219.25 million from NT$13.82 billion a year earlier.
The company returned to profit on a pretax basis beginning in August.
Revenue fell 16 percent to NT$284.18 billion in the January-to-November period from NT$337.14 billion in the same period last year.
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