The turnaround came after the company raised domestic prices three times this year, while its near-term pricing outlook became brighter amid rising international steel prices and better market sentiment.
The unaudited pre-tax income reached NT$899 million last month, the company said in a Taiwan Stock Exchange filing.
That was big enough for the company to make a profit in the first quarter, after reporting losses of NT$68 million in the first two months of this year.
The company attributed last month’s profit increase to a 30 percent rise in sales volume to 1.02 million tonnes from 786,717 tonnes in February, while revenue increased to NT$24.72 billion from about NT$18 billion in February, it said.
However, consolidated revenue for the first three months still dropped 19.61 percent to NT$64.96 billion from the same period last year, as sales gains of 18.55 percent annually to 2.7 million tonnes were offset by declines in steel prices over the period.
China Steel posted losses of NT$1.52 billion in the fourth quarter of last year amid sluggish demand, but global market sentiment has rebounded since the beginning of this year, with steel mills in China, the US and Europe raising their steel prices significantly in the first quarter, while the oversupply in China has been mitigating, the company said.
CSC on Wednesday said it would raise prices by 10.5 percent per tonne on average, following hikes of 3.1 percent announced in February and 2.3 percent in January.
Credit Suisse Group AG on Thursday said it now is more positive about the company’s future pricing outlook, as the global inventory cycle has bottomed out and 100 million tonnes of idling capacity in China looks unlikely to return from winter maintenance.
However, the ramp-up in production at the company’s 25 percent owned Formosa Ha Tinh Steel Corp (台塑河靜鋼廠) in Vietnam could be an earnings headwind going into the second half of this year, Credit Suisse said in a client note.
Capital Securities Corp (群益證券) said in a separate note on Thursday that a still-weak demand for steel in China might cast the greatest uncertainty over further price hikes in the second half of this year.
China Steel is to announce price adjustments for July and August shipments by the end of next month, which are likely to give a clearer picture of market outlook for next quarter.
The company’s shares closed at NT$22.85 on Friday in Taipei trading, up 27.3 percent so far this year and outperforming the TAIEX’s 2.37 percent increase over the same period.
