China Steel Corp (中鋼), the largest steelmaker in Taiwan, yesterday cut domestic steel prices by up to NT$2,000 per tonne for domestic deliveries next month and next quarter, as a global steel industry recovery fell short of expectations, while customers continue to deal with excess inventory.
The Kaohsiung-based steelmaker said that world steelmakers received rush orders in the first quarter, but that growth momentum was unable to persist as demand from China was not as strong as expected after it emerged from strict COVID-19 rules earlier this year.
China is the world’s biggest steel consumer and producer.
Photo: Tyrone Siu, Reuters
Faltering demand in the US and Europe was also a factor, the company said.
“The global steel industry recovered at a slower pace than expected in the second quarter, causing an excessive drop in steel prices,” China Steel said in a statement. “The company’s latest pricing factored in downstream customers’ inventory impairment losses, aiming to help them enhance their price competitiveness.”
China Steel said it would cut steel prices for a second straight month by between NT$1,000 and NT$1,500 per tonne for domestic delivery next month, with the steepest price cuts for cold-rolled plates.
For the whole of next quarter, the price cuts would be even deeper, by between NT$1,500 and NT$2,000 per tonne, it said.
Prices of rod lines, regular steel plates, hot-rolled steel plates and coils, as well as high-end cold-rolled coils, would fall by NT$2,000 per tonne. The price of cold-rolled coils used in vehicles would drop by NT$1,500 per tonne.
China Steel said it expects global prices to bottom out next month, when demand would rebound extensively, aided by Beijing’s efforts to speed up infrastructure construction and further relax property regulations in the second half of this year.
China Steel encouraged customers to build up inventory to prepare for the recovery before prices rise.
In Taiwan, demand for steel used in electronic casings has increased, driven by rising demand for artificial-intelligence servers, high-performance computing devices, computers, cars and scooters, China Steel said.
The latest steel price quotes from its Chinese competitors — Baowu Steel Group Ltd (寶武鋼鐵), the world’s biggest steelmaker, and Angang Steel Co (鞍山鋼鐵) — were a strong indicator that prices were stabilizing, it said.
The Chinese steelmakers kept July steel prices unchanged, it said.
China has significantly reduced its crude steel inventory by 6 percent to 90.12 million tonnes last month, from its peak of 95.76 million tonnes in March due to drastic supply cuts, indicating that an overcapacity issue in the country was improving, China Steel said.
Global steel demand is expected to grow 2.3 percent annually to 1.82 billion tonnes this year, a World Steel Association projection showed.
Shares of contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) came under pressure yesterday after a report that Apple Inc is looking to shift some orders from the Taiwanese company to Intel Corp. TSMC shares fell NT$55, or 2.4 percent, to close at NT$2,235 on the local main board, Taiwan Stock Exchange data showed. Despite the losses, TSMC is expected to continue to benefit from sound fundamentals, as it maintains a lead over its peers in high-end process development, analysts said. “The selling was a knee-jerk reaction to an Intel-Apple report over the weekend,” Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang
TRANSITION: With the closure, the company would reorganize its Taiwanese unit to a sales and service-focused model, Bridgestone said Bridgestone Corp yesterday announced it would cease manufacturing operations at its tire plant in Hsinchu County’s Hukou Township (湖口), affecting more than 500 workers. Bridgestone Taiwan Co (台灣普利司通) said in a statement that the decision was based on the Tokyo-based tire maker’s adjustments to its global operational strategy and long-term market development considerations. The Taiwanese unit would be reorganized as part of the closure, effective yesterday, and all related production activities would be concluded, the statement said. Under the plan, Bridgestone would continue to deepen its presence in the Taiwanese market, while transitioning to a sales and service-focused business model, it added. The Hsinchu
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has approved a capital budget of US$31.28 billion for production expansion to meet long-term development needs during the artificial intelligence (AI) boom. The company’s board meeting yesterday approved the capital appropriation plan for purposes such as the installation of advanced technology capacity and fab construction, the world’s largest contract chipmaker said in a statement. At an earnings conference last month, TSMC forecast that its capital expenditure for this year would be at the higher end of the US$52 billion to US$56 billion range it forecast in January in response to robust demand for 5G, AI and
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) investment project in Arizona has progressed better than expected, but it still faces challenges such as water and labor shortages, National Development Council (NDC) Minister Yeh Chun-hsien (葉俊顯) said yesterday. Speaking with reporters after visiting TSMC’s Arizona hub and attending the SelectUSA Investment Summit in Maryland last week, Yeh said TSMC’s Arizona site turned a profit of NT$16.14 billion (US$514 million) last year in its first full year of mass production. “TSMC told me it was surprised by the smooth trial run of the first fab, which has left the company optimistic about the project’s outlook,”
RSS