As predicted, leading steelmaker China Steel Corp. has announced a NT$1396 increase for each ton of steel for its domestic sales in the second quarter.
This marks a 6.9 percent increase, which fits with experts’ forecast of a 5 to 8 percent increase. According to experts, the first half of the year will be a relatively stable one for the steel market, while the situation in the latter half of the year will depend on price hikes in upstream raw materials. Furthermore, other factors include the demand of terminal markets and whether China can maintain its 2016 trend in reducing productivity.
China Steel Corp. has pointed to China’s reiteration of a GDP goal of 6.5 to 7 percent growth in its 13th five-year plan. This was on one hand to maintain the public’s trust and, on the other hand, to stimulate demand to reach the goal. In another area, although U.S. President Trump has expressed a desire for American-made products, the U.S. remains an importer of steel products. Given that American steel prices are relatively high, if Trump were to use trade barricades to stop steel imports, it would in reality affect only low-priced steel products. Not only would high-quality steel products not be affected, the ban would actually give these products more opportunity in the market.
The corporation pointed to Trump’s railway plans, China’s silk road economic belt and Japan’s 2020 Olympics in Tokyo to show that from a demand perspective, there is plenty to support the steel market. Furthermore, the global economy is rebounding (the International Monetary Fund has predicted global economic growth of 3.4 percent this year, which is 0.3 percent higher than last year) and posting higher growth rates than those expected of developed countries, and these factors are expected to be beneficial to demand in the market.
Source: The China Post
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