China Steel Corp (中鋼), the nation’s only integrated steelmaker, yesterday said it would lower steel prices by 4 percent on average for September shipments in response to fluctuations in global markets.
The price cut, the company’s first this year, would help enhance the competitiveness of downstream companies in the domestic steel industry, China Steel said in a statement.
Prior to the cut, the company had raised prices by 26.6 percent from the beginning of the year.
Based on the adjustment, China Steel is to lower prices of its products by NT$688 per tonne for September contracts, excluding steel plates, it said.
Prices for benchmark hot-rolled sheets and coils would fall by NT$900 per tonne for September shipments, those for cold-rolled sheets and coils — which are used mainly in the automotive industry — are to drop by NT$900 per tonne, while hot-dipped, zinc-galvanized sheets will see prices cut by NT$525 per tonne, it said.
The company said it had taken both global and domestic factors into consideration when discussing price adjustments, with the range of cuts depending on markets for different products.
“For example, we did not adjust the price of steel plates, because we saw that the market is relatively stable,” China Steel vice president for sales Liu Jih-gang (劉季剛) said by telephone.
Apart from the fluctuations in foreign-exchange markets following the UK’s vote to exit the EU last month, market headwinds also include the uncertain recovery of eurozone economies and China’s economic challenges from its industrial transformation, China Steel said.
Liu said the third quarter is a traditional low season for the company because of rainy seasons in Southeast Asia, while Ramadan is also a factor this year.
While the demand in summer is usually lower and the fourth quarter might perform better, Liu said the market outlook is still not clear in view of the great fluctuations in global steel prices in recent months, especially in China.
“Every day the price changes,” he said.
However, prices in Asia are stabilizing and the inventory of crude steel in China is at a lower level, an indication that prices might start to rise in the second half, Liu said.
China Steel’s revenue came to NT$24.97 billion last month, up 3.96 percent from a year earlier, company data showed. Accumulated revenue in the first six months reached NT$137.29 billion, an 11.06 percent decrease from the same period last year.
The company last month said that its business in the second half would outpace the first half.
“I am cautiously optimistic that momentum will extend to the final quarter of this year,” China Steel chairman Andrew Sung (宋志育) said at a shareholders’ meeting in Kaohsiung last month.
