China Steel Corp (中鋼), the nation’s largest steelmaker, yesterday said it would cut domestic steel prices by 2.1 percent on average for delivery next month in response to a brief slowdown in steel demand and to help customers mitigate mounting manufacturing costs caused by geopolitical issues.
However, the company said it expects steel demand to pick up in the second half of the year, benefiting from infrastructure programs in China, as lockdowns there could gradually be lifted later this year, as well as post-war reconstruction projects, if Russia’s war in Ukraine stabilizes.
The Kaohsiung-based company’s move matches its Chinese counterparts’ recent downward price adjustments, it said in a statement.
China’s Baowu Steel Group Croup Ltd (寶武鋼鐵) and Angang Steel Co (鞍山鋼鐵) lowered their steel prices by up to 200 yuan (US$29.45) per tonne, as demand in Asia plunged during the rainy season and in the month of Ramadan, China Steel said.
Formosa Ha Tinh Steel Corp (台塑河靜鋼廠) in Vietnam is likely to follow suit, it added.
The World Steel Association recently trimmed its forecast for global steel demand this year to an annual increase of 0.4 percent, or 1.84 billion tonnes, down from an earlier estimate of 2.2 percent growth, China Steel said.
As a result, the steelmaker said it is slashing prices by NT$300 to NT$500 per tonne for steels used in a wide range of areas from construction to computers and vehicles.
However, the price of hot-rolled steel coils would remain unchanged, given robust demand for American Petroleum Institute steel pipes for oil and gasoline transmission systems, it said.
As European nations plan to stop importing oil from Russia because of its invasion of Ukraine, demand for US shale oil may climb, leading to increased demand for oil transmission pipes, China Steel said.
“The company decided to adopt a stable pricing strategy, considering that local downstream steel companies are facing ... high commodity costs due to geopolitical tensions. Besides, the COVID-19 pandemic has upended global supply chains and propped up logistics costs,” China Steel said.
“To enhance customers’ competitiveness, the company decided to cut steel prices,” it added.
Based on China Steel’s price adjustment plan the price of hot-rolled plates, hot-rolled coils and cold-rolled coils would drop by NT$500 per tonne. The price of hot-dipped zinc-galvanized steel coils used in construction and baking finish would also fall by NT$500 per tonne.
The price of galvanized steel used in home appliances and computers, and electrical steel rolls would decline by NT$300 per tonne.
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