China Steel Corp (中鋼), the nation’s largest steelmaker, yesterday said that it would raise steel prices 5.83 percent on average for shipments next quarter to reflect cost hikes caused by economic sanctions against Russia.
The price hikes would mean extra charges of NT$1,000 to NT$2,400 across its product line, although prices would remain competitive in comparison with foreign peers, the company said in a statement.
Next quarter is the peak season for companies to replenish inventory after other countries chose to do away with COVID-19 lockdowns and other disease prevention measures, China Steel said.
Photo courtesy of China Steel Corp
However, Russia’s invasion of Ukraine has cast a shadow over the global economic scene, as it has disrupted the two countries’ exports of agricultural and industrial raw materials, as well as sources of energy, creating an imbalance in global supply and demand, it said.
Economic sanctions imposed by the US and European countries on Russia have left Asian buyers no choice but to find supply from more expensive European sellers, the company said, adding that prices for raw materials, crude oil and grain have soared since the invasion began on Feb. 24, and volatile prices have prompted some Asian steel mills to stop taking new orders.
The ongoing price hikes are as drastic as those seen last year when steel demand benefited from infrastructure spending by major economies to mitigate the effects of the COVID-19 pandemic, it said.
China Steel said that it has no choice but to raise prices that its cost burden, and that of local downstream steel makers, is better reflected.
It aims to follow the global trend, while factoring in the market’s stability in an appropriate fashion, the company added.
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