Posted on 16 Dec 2008
Because of the weakened market demand in the wake of the big slump in steel prices, China Steel Corporation (CSC), Taiwan`s largest integrated producer of steel products, is expected to see orders for delivery in the first quarter of 2009 drop to only 30% of orders received for delivery in the fourth quarter of 2008.
The huge drop in orders received by CSC indicates domestic steel firms, no matter upstream or downstream, will face a tough market situation in 2009.
CSC cut domestic wholesale steel prices by 22.56% on the products to be shipped in first quarter of 2009, representing the largest price cut since its inception in 1971. CSC said the downward adjustment in domestic wholesale steel prices is aimed at encouraging downstream firms to take orders with the supply of comparatively low-priced steel materials so as to pave way for revitalizing the steel market.
Despite the CSC`s goodwill, domestic steelmakers are still suffering from evaporated orders placed by foreign buyers because of the global economic recession and the consistent slump in the steel prices quoted in the international marketplace.
A domestic trader in this line said that based on the experience over the past three decades, the CSC is eventually a winner by offering steel materials to domestic clients at a price lower than quoted in the international market because they want to maintain long-term relations with the CSC.
Still the awful situation in the international steel market is ever seen over the past three decades. With no clear sign of recovery ahead, domestic downstream firms of steel products have little willingness to stockpile raw materials.
To help ease the operating pressure on downstream clients, CSC has taken such flexible measures as the time for retrieving ordered goods and keeping up quotas deserved by clients.
