China Steel Corp (CSC, 中鋼), the nation’s largest steelmaker, yesterday said it would lower domestic steel prices by 3.32 percent on average for delivery next month, as imports from China and Russia have been trading lower than market prices, depressing demand for local steel.
The price cut, the fourth monthly reduction in a row, also reflects weak demand from customers that are trying to deplete excessive inventories, the Kaohsiung-based company said in a statement.
The reduction is milder than the 5.61 percent cut for shipments this month, which CSC said points to more signs of a global recovery.
Photo courtesy of China Steel Corp
“The price cut aims to dispel market speculation [about a deeper downward revision] and better reflect market conditions,” CSC said. “The company expects a turnaround in September and is prepared for the traditional high season to arrive in the fourth quarter.”
With a weakening global economy and extreme weather events significantly curtailing demand for high-priced commodities — slowing steel inventory digestion — major steelmakers in the US, Europe and China are reducing output by suspending operations at some furnaces for maintenance, CSC said, adding that this would help mitigate a supply glut and bring forward the low point for steel prices.
Chinese steelmakers such as Baowu Steel Group Group Ltd (寶武鋼鐵) and Angang Steel Co (鞍山鋼鐵) are seeking a price rebound as Beijing is to inject 7.2 trillion yuan (US$1.06 trillion) into infrastructure construction projects to boost economic growth, CSC said.
Moreover, European steelmakers might raise prices to reflect rising electricity rates and energy costs, while US steelmaker Nucor Corp has hiked the price of thin steel sheets, it said.
The latest price trends “indicate that the global steel industry is seeing a price rebound from the dip,” it said.
The latest price adjustments would lower prices of hot-rolled steel plates and coils by NT$1,000 per tonne and cold-rolled coils by NT$1,200 per tonne, the company said.
Prices of galvanized steel coils used in anti-fingerprint sheets and those for construction would both fall NT$1,000 per tonne, the company said.
Prices of hot-dipped, zinc-galvanized steel coils used in construction and enameled steel, and those used in home appliances and computers would fall by NT$1,000 per tonne, while prices for electrical steel roll would drop by NT$1,200 per tonne, it added.
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