News Room - Steel Industry

Posted on 18 Dec 2007

Manufacturers of Steel Round Bars Benefit From Product Price Hike

Thanks to the consistent product price hikes, domestic manufacturers of steel round bars who hold a bunch of material inventories will be the winners in the iron and steel market.

The firms with electric furnaces and vast material inventories include Tung Ho Steel Enterprise Corp., Feng Hsin Iron & Steel Co. and Wei Chih Steel Industrial Co.

Recently the quoting prices for steel round bars have hit the historic high record of NT$21,300 (US$659.44 at US$1:NT$32.3) per metric ton because of the insufficient supply of imported semi-finished products.

A steel trader here pointed out that mainland China will raise the customs duties for exported semi-finished steel products and materials starting from the beginning of next year with an aim to curb steel exports and reduce international trade dispute.

Taiwan`s traders quoted the spot prices for steel billets, the major material for rolling out steel round bars, at US$630 C&F per metric ton at present time, up US$50 from the previous month. An industry insider said the price hike in steel billets can be mostly attributed to the insufficient supply of semi-finished steel products and the increased maritime freight rates. In addition, mainland China has imposed a 15% tariff on exported steel billets, hoping to curb exports of the products. Russia and Ukraine have also slashed exports of semi-finished steel products to meet their booming domestic demand.

Taiwan had to import approximately six million metric tons of steel billets at its heyday several years ago. But the imports were cut to between three million and four million metric tons in the past two years. In the first 10 months of this year, the import amount further declined to 1.055 metric tons, which has stifled domestic production of steel round bars.

At present, the ex-factory price for steel round bars is quoted at over NT$21,100 (US$653.25) per metric ton. Some even quoted the products at NT$21,300 (US$659.44) per metric tons, an increase of NT$1,000 (US$30.9) from a month ago.

It is expected supply of steel billets will further decline in 2008 because mainland China has planned to raise the export custom duties for the products to 25% in the beginning of 2008 from 15% at present time. Accordingly, Taiwan will face a more serious shortfall in supply of steel round bars in 2008.