China Steel Corp, Taiwan’s leading steel producer, announced a reduction in steel prices for domestic deliveries next month, marking its first comprehensive price cut since August of last year. The company stated that this decision was driven by challenges in the global steel market, particularly the surge in low-cost exports from China.
The price cuts reflect the current subdued market conditions, which have been influenced by factors such as extreme weather, financial market instability, and the typical slowdown during the summer months. Despite a recent drop in iron ore prices to around USD 100 per ton and coking coal prices to USD 210-220 per ton, CSC noted that production costs remain relatively high on a long-term basis.
In response to these challenges, CSC will lower the price of its HRC by NTD 600 (approximately USD 18.60) per ton and reduce the price of CRC by NTD 500 (around USD 15.50) per ton.
The company explained that this price reduction aims to support its domestic downstream customers in securing orders and mitigating the impact of low-priced steel imports. CSC highlighted that China's ongoing oversupply of steel has exacerbated the situation, resulting in a significant volume of low-cost steel being exported.
According to data from the China Iron and Steel Association, China’s steel exports increased by 21.8% y-o-y to 61.23 million tons in the first seven months of this year, while average export prices fell by 24.8%. This trend has intensified pressure on the global market, leading countries such as Vietnam, Thailand, and Turkey to initiate trade measures, including anti-dumping actions against China’s hot-rolled steel products. CSC indicated that it plans to seek trade remedies in Taiwan to curb the influx of low-cost Chinese steel.
Earlier this month, ArcelorMittal SA, the world’s second-largest steel producer, expressed concerns over China’s aggressive export strategy, which is straining the global steel industry. Similarly, China Baowu Steel Group Corp, the world’s largest steelmaker, recently warned of an industry crisis as steel prices continue to decline.
On Tuesday, CSC reported a significant increase in net profit for the first half of the year, soaring 635.58% y-o-y to NTD 1.96 billion (USD 60.7 million). The company also reported a 1.2% y-o-y increase in consolidated revenue, reaching NTD 217.6 billion in the first seven months of this year.
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