China Steel Corp (CSC, 中鋼), the nation’s largest integrated steelmaker, yesterday said that it would raise domestic steel prices by 9.5 percent for delivery next month, with the hike exceeding market expectations.
The adjustment is the eighth straight month of increases for the Kaohsiung-based company.
Prices are to increase by NT$2,200 per tonne for hot-rolled steel, hot-rolled plates and electro-galvanized sheets, NT$2,500 per tonne for cold-rolled steel and NT$3,000 per tonne for electrical sheets, CSC said in a statement.
Photo: Tyrone Siu, Reuters
The company attributed the price hikes to increased raw material costs for steelmakers and robust demand for steel, it said.
On the supply side, iron ore prices are at “a 10-year high” of up to US$170 per tonne, the company said, citing market concern about supply constraints at Brazilian and Australian mining operations.
Along with coal prices remaining high — up to US$105 per tonne — CSC’s costs for steel production have jumped “by US$60 to US$65 per tonne,” it said.
Global demand for steel has soared as economies around the world continue to recover, it said.
“It is not unusual to see buyers chasing limited supply, and some Japanese steelmakers have put January orders on hold,” CSC said.
Japanese hot-rolled steel has traded for as much as US$800 per tonne, while in Europe it has broken US$850 and in the US reached US$1,200, closing in on a record, CSC said.
Hot-rolled steel is mainly used in the manufacturing of automobiles, home appliances and sports gear.
CSC said domestic steel prices still lag behind international prices, indicating that there remains room for increases.
“Although our prices for domestic delivery are far lower than international levels, we have to take into consideration the competitiveness of downstream companies as the New Taiwan dollar rises” against the US dollar, CSC said.
“We are keeping to our principles of smooth and stable pricing, while reflecting material costs,” it said.
Meanwhile, the company on Monday called for discipline among Taiwanese steel companies amid an overheated local market.
“There have been reports of steel firms hoarding stock and pushing prices up. We call upon the industry to maintain an orderly market,” CSC said.
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