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.
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