A surge in China’s prices failed to stem steel exports in the first four months of the year, signaling that demand remains weak in the top user. Futures in Shanghai slumped by the exchange limit yesterday.
Shipments climbed to 36.9 million metric tonnes in the four months to last month, up 7.6 percent from a year earlier, according to data released by China’s General Administration of Customs on Sunday. Mills boosted exports even as prices of steel rebar in Shanghai advanced by more than 50 percent at one point this year to their highest level since September 2014.
Steel prices in China had rebounded from five years of losses as the economy stabilized, the property market improved and investors piled into raw material futures.
Photo: Reuters
Shipments of the raw material slid to 9.08 million tonnes last month from 9.98 million tonnes in March as a rally revived profit margins at some mills and curbed their need to seek increased income from markets outside the country.
Steel-product exports surged “despite a rebound of domestic steel prices, indicating that Chinese steel demand might be weaker than expected,” analysts, including Edward Morse at Citigroup Inc, wrote in a note dated yesterday.
Steel rebar, used to strengthen concrete, yesterday slumped by the exchange limit to 2,175 yuan (US$334) a tonne. Futures had surged to 2,787 yuan on April 21, the highest intraday level since September 2014, spurring bourses in China to take steps to curb a speculative frenzy in commodities.
Last year, steelmakers in China shipped a record 112 million tonnes overseas, sending the global market into a tailspin as profits and prices collapsed. This year, the sales might ease to 100 million tonnes as local demand strengthens, according to an estimate from the China Iron and Steel Association.
Iron ore imports last month totaled 83.92 million tonnes, compared with 85.77 million a month earlier, according to customs figures.
Over the first four months, purchases of ore were 325 million tonnes, about 6.1 percent more than in the same period last year. China is the world’s largest buyer of seaborne iron ore, and its mills account for about half of global steel supply.
ArcelorMittal, the biggest steel-producing company in China, last week cautioned that while it saw a broad recovery in the global market, Chinese prices might have overshot and could fall back.
Risks remained in China because fundamental overcapacity still existed, ArcelorMittal chief financial officer Aditya Mittal told reporters as the Luxembourg-based company reported a drop in quarterly earnings.
“Steel mills, skeptical of whether the high price is sustainable, continued to be keen to sell overseas,” said Wei Yingsong, an analyst at Mysteel Research.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said that its investment plan in Arizona is going according to schedule, following a local media report claiming that the company is planning to break ground on its third wafer fab in the US in June. In a statement, TSMC said it does not comment on market speculation, but that its investments in Arizona are proceeding well. TSMC is investing more than US$65 billion in Arizona to build three advanced wafer fabs. The first one has started production using the 4-nanometer (nm) process, while the second one would start mass production using the
A TAIWAN DEAL: TSMC is in early talks to fully operate Intel’s US semiconductor factories in a deal first raised by Trump officials, but Intel’s interest is uncertain Broadcom Inc has had informal talks with its advisers about making a bid for Intel Corp’s chip-design and marketing business, the Wall Street Journal reported, citing people familiar with the matter. Nothing has been submitted to Intel and Broadcom could decide not to pursue a deal, according to the Journal. Bloomberg News earlier reported that Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is in early talks for a controlling stake in Intel’s factories at the request of officials at US President Donald Trump’s administration, as the president looks to boost US manufacturing and maintain the country’s leadership in critical technologies. Trump officials raised the
‘SILVER LINING’: Although the news caused TSMC to fall on the local market, an analyst said that as tariffs are not set to go into effect until April, there is still time for negotiations US President Donald Trump on Tuesday said that he would likely impose tariffs on semiconductor, automobile and pharmaceutical imports of about 25 percent, with an announcement coming as soon as April 2 in a move that would represent a dramatic widening of the US leader’s trade war. “I probably will tell you that on April 2, but it’ll be in the neighborhood of 25 percent,” Trump told reporters at his Mar-a-Lago club when asked about his plan for auto tariffs. Asked about similar levies on pharmaceutical drugs and semiconductors, the president said that “it’ll be 25 percent and higher, and it’ll
CHIP BOOM: Revenue for the semiconductor industry is set to reach US$1 trillion by 2032, opening up opportunities for the chip pacakging and testing company, it said ASE Technology Holding Co (日月光投控), the world’s largest provider of outsourced semiconductor assembly and test (OSAT) services, yesterday launched a new advanced manufacturing facility in Penang, Malaysia, aiming to meet growing demand for emerging technologies such as generative artificial intelligence (AI) applications. The US$300 million facility is a critical step in expanding ASE’s global footprint, offering an alternative for customers from the US, Europe, Japan, South Korea and China to assemble and test chips outside of Taiwan amid efforts to diversify supply chains. The plant, the company’s fifth in Malaysia, is part of a strategic expansion plan that would more than triple
RSS