China Steel Corp (CSC, 中鋼) expects steel demand to increase on the back of governments around the world subsidizing infrastructure construction amid a stabilizing COVID-19 pandemic, CSC chairman Wong Chao-tung (翁朝棟) told an investors’ meeting yesterday.
“After getting through the hard times, I foresee at least one year, very possibly two years, of strong steel market,” Wong said.
Calling a dip in steel prices a “short respite for the market,” Wong said that it would likely bounce back early next year on the back of mild winter temperatures around the world allowing construction activity.
Photo: Lin Ching-hua, Taipei Times
Despite COVID-19 spikes in some regions and increased calls for carbon-neutral steel production, the company is looking forward to a “positive development” in the steel market on the back of higher commodity prices and continued strong worldwide demand, Wong said.
“Countries around the world, especially the US, are investing in infrastructure projects, leading to strong steel demand,” Wong said. “The whole world is fighting to boost the economy.”
Pressure to transition to more climate-friendly production methods would be offset by higher prices, he said.
“Nippon Steel predicted that carbon neutrality targets will increase the cost of steel by more than 10 percent,” Wong said. “The era of high-priced steel has arrived.”
CSC executive vice president Hwang Chien-chih (黃建智) said that recent softness in the steel market was due to logistics logjams and a lack of clarity in Chinese markets.
“The demand will likely be pushed into the first half of next year,” Hwang said. “The mid to long-term prospects of the steel market has not been affected.”
The World Steel Dynamics report predicted rising steel prices in the first half of next year amid rebounding demand in China, Hwang said.
However, the report forecasts the rebound to dissipate in the second half of the year, causing pieces to fall, Hwang added.
“It’s not certain that the prices of steel will fall. It will depend on what decarbonization policies we see from countries around the world, and also whether steel price will be supported by continued high commodity prices,” Hwang said.
“Iron ore prices shot up by more than 20 percent in the past three days, back to US$99.45 per tonne, and prices will likely stay above US$100 per tonne, while coking coal prices remain high at US$317 per tonne,” Hwang said. “Both commodities will lend strong support to steel prices.”
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