China Steel Corp (CSC, 中鋼), Taiwan’s largest steelmaker, yesterday said it would keep domestic steel prices unchanged for deliveries next month for a second consecutive month, buoyed by improving supply chain inventory and rising manufacturing costs.
That could pave the way for a price rebound next month as the Kaohsiung-based steelmaker is seeing more signs that the global steel industry’s downtrend is bottoming out due to a reduction in steel production.
Steel production in Europe is constrained by soaring energy prices and reduced imports of semi-finished products from Russia, leading to a shortage, CSC said in a statement yesterday.
Photo courtesy of China Steel Corp
In Asia, South Korea’s POSCO Holdings’ factories have not fully recovered from the damage caused by floods, while India’s ArcelorMittal Nippon Steel has shut its factories for annual maintenance, causing a tight supply of steel billets, CSC said.
Steel production in China has been under strict government strict control this year, it said.
On the demand side, the US and China are expected to launch new economic stimulus measures later this year, which is expected to prop up demand, it said.
Rising energy prices have prompted a 30 percent price hike for Australian coking coal, while a weak foreign exchange rate against the US dollar is adding to the mounting cost pressures, CSC said.
In response, China’s Baowu Steel Group Ltd (寶武鋼鐵) and Angang Steel Co (鞍山鋼鐵) have raised prices for some deliveries next month by US$14 per tonne, while keeping other prices unchanged, it said.
“Rising production costs is helping global steel prices to bottom out, though the global economy is facing challenges,” CSC said. “Supply chain inventory has fallen to a reasonable level, lending support to demand.”
As well as keeping prices for all products unchanged for delivery next month, CSC has launched promotion packages that aim to accelerate inventory reductions, the statement said.
Falling steel prices and demand has weighed on CSC’s revenue, with revenue last month tumbling 28.75 percent to NT$29.91 billion (US$938.1 million), the lowest level this year, the company said earlier this month.
During the first nine months of the year, the company posted NT$354.19 billion in revenue, 4.53 percent year-on-year growth from NT$338.85 billion in the same period last year.
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