Posted on 18 Oct 2023
China Steel Corp (CSC, 中鋼) yesterday announced that it would keep domestic steel prices unchanged for deliveries next month following three consecutive months of price hikes.
The company said it reached the decision after accounting for several factors, including geopolitical conflicts, resilient macroeconomic developments, supply-demand dynamics and rising costs for raw materials such as iron ore and coking coal.
CSC said it is cautious about its demand outlook, adding that the United Auto Workers strikes at three US plants have curbed short-term demand for automotive steel.
As the unrest in the Gaza Strip has caused fluctuations in international oil prices, “whether it would lead to a sudden increase in demand for oil and metal products — just like what had happened in the early days of the Russia-Ukraine war — remains to be seen,” it said in a statement.
On the other hand, global steel supply would remain tight in the near term, CSC said, citing China’s implementing of production cuts in the winter as part of environmental protection plans, Russia’s imposing export levies from this month to curb outbound shipments and South Korean steel mills’ annual maintenance at hot rolling production lines later this month.
Furthermore, steel mills around the world are facing rising costs as the price of iron ore climbed to US$119 per tonne this month, while the price of coking coal rose 18 percent month-on-month to US$368 per tonne, it said.
Governments’ efforts to reduce carbon emissions has also prompted steel mills to heavily invest in equipment, adding more pressure to their operations, it said.
“While international steel prices are fluctuating and there are concerns about the resurgence of inflation amid rising geopolitical conflicts, inventory destocking in downstream industries is coming to an end,” CSC said.
“By considering rising raw material costs and export competitiveness of domestic downstream customers, the company decided to keep steel prices unchanged for next month,” it said.
Last week, the company reported that consolidated revenue last month decreased 1.52 percent year-on-year to NT$29.46 billion (US$912.7 million), and cumulative revenue in the first nine months of the year fell 22.38 percent to NT$274.93 billion.
Pretax profit was NT$513.93 million last month, compared with a pretax loss of NT$1.41 billion a year earlier, while total pretax profit in the first nine months dropped 93.96 percent to NT$1.84 billion, from NT$30.44 billion in the same period last year, company data showed.
Source:Taipei Times
