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China Steel hikes prices, citing demand

China Steel Corp, Taiwan’s largest steel producer, yesterday raised its prices for domestic steel for delivery next quarter by 1.4 percent as new infrastructure construction projects and new housing developments stimulate demand.

The latest price hikes of NT$326 per tonne on average marked the fifth consecutive quarter of increases as CSC took cues from upward price adjustments by its global peers amid supply constraints, especially in Asia.

China’s Baoshan Iron & Steel Co, Wuhan Iron and Steel Corp and Angang Steel Co recently raised prices by US$15 to US$22 per tonne on hot-rolled items for third-quarter contracts, reflecting a hot property market in China, Kaohsiung-based CSC said in a statement after a quarterly meeting to decide domestic prices.

With Beijing to accelerate infrastructure construction spending in the second half, rising demand for steel would further boost prices, even though some local governments are curbing steel output to rein in emissions, the company said.

“There is still scope for further global price hikes in the fourth quarter, given a promising demand outlook,” China Steel said in the statement.

ArcelorMittal SA, the world’s largest steelmaker, has raised its forecast for global steel demand growth to between 2 and 3 percent this year, up 0.5 percentage points from its estimate in January, shrugging off the US-China trade dispute, China Steel said.

It said the price of steel plates would next quarter go up NT$575 per tonne and prices for bars or wire rods are to rise NT$500 per tonne, while hot-rolled sheets and coils are to see a hike of NT$293 per tonne and hot-dip galvanized sheet prices are to be raised by NT$103 per tonne.

Prices of electric sheets are to drop by NT$643 per tonne, CSC said.

“The price increases of 1.4 percent might be slightly lower than market expectations,” China Steel vice president Hwang Chien-chih said by telephone. “We have to take local customers’ competitiveness into consideration.”

Local steelmakers are facing challenges from growing protectionism and intensifying tension on trade between the US and the rest of the world, while steel products from Turkey and India have become more appealing after steep currency falls, China Steel said.

Local steelmakers are facing 25 percent punitive tariffs in the US after provisional safeguard measures took effect last month. Exports of about 23 steel product categories from Taiwan are subject to the sanctions.

Source: Taipei Times

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