China Steel Corp (中鋼) yesterday reported a profit for the first time since September last year, thanks to improving economic prospects following China’s reopening and its doubling down on an infrastructure budget to stimulate economic growth.
The Kaohsiung-based steelmaker said that restocking demand and an uptick in steel prices helped it return to the black last month.
Shipments expanded 15 percent last month to 930,000 tonnes from 800,000 tonnes in January, a company statement said.
Photo courtesy of China Steel Corp
China Steel reported a net profit of NT$69.3 million (US$2.28 million) for last month, after posting a pre-tax loss of NT$1.09 billion in January, the statement said.
However, the company remained in the red in the first two months of the year, with a combined pretax loss of NT$1.02 billion, compared with a pretax profit of NT$9.86 billion a year earlier.
“As the global manufacturing sector is bottoming out, the company expects to see a new round of solid steel demand. That would pave the way for a rebound in global steel prices,” China Steel said in the statement.
“As the second quarter is usually a peak season for the steel industry, we expect to see robust steel demand,” it added.
As a result, China Steel expects its operations to “improve step by step in the second quarter,” the statement said.
The company last week raised local prices in response to improving steel demand and surging raw material costs.
It hiked prices for delivery next month by between NT$800 and NT$1,000 per tonne, while prices for the second quarter as a whole are to rise by NT$1,500 to NT$2,000 per tonne. The price hikes are applicable to almost all products, it said.
Steel products used in the construction and auto manufacturing sectors posted the largest price increases for next month and next quarter.
Hot-rolled steel plates and hot-rolled steel are to increase by NT$1,000 per tonne each next month and by NT$2,000 next quarter.
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