Prices Adjustment for 2014 December Domestic Sales

2014-10-17

On Oct 17th, 2014, Taiwan’s China Steel Corporation (CSC) held the domestic pricing meeting for December 2014 delivery and announced the following statement: 
On global economic perspective of view, due to the approaching of US’s QE ending, the strong economic growth momentum and the easing of the expectations of interest raise by FED because of the slowdown of global recovery and hard appreciation of US dollars, the short-term outlook in the US is still optimistic. In the Eurozone, with plummeting economic indicators and consumer confidence, escalating risk of deflation and historical low interest rate, it is expected that the ECB could apply QE policy proactively to avoid further recession. In China, the export and import are both recovered by the policy of mini-stimulus package, easing the doubt of economic hard landing temporarily. However, the credit bubble and overcapacity issue still bring significant downward pressure on steel market. By the stagnation of Eurozone and deceleration in the emerging markets, IMF has lowered its forecast for world economic growth rates for both 2014 and 2015. As to Taiwan, even facing the external environment variables, Taiwan’s export still increased by seasons, and private investment as well as consumption grow moderately. Institutions and researches revised the GDP forecast upward, the overall status shows prudently optimistic. 
Slowing growth of global economy leads to a decrease of steel demand in Q4, the traditional demand seasons. By the high inventory level and quiet market, steel price in US has turned down after a period of upward trend. However, the economy factors still stay positive and support the demand of steel products. Although the summer vacation was over, stagnation in the Eurozone leads to a soft price in steel market. Recent price drop of iron ore and stiff competition in Asian market due to oversupply of Chinese mills drag the steel price further. According to WSA’s forecast, the world steel demand will grow by another 2%, reaching 1,593 million tonnes next year. With the expanding of Chinese government’s stimulus policy and infrastructure investment, we expect that the steel market will reach steady state and space for price slashing will be limited.
Facing the risk of global politics and economics with international steel price correction, Taiwan’s domestic downstream customers are conservative and remain hesitant to place orders. In order to reflect current market situation and maintain customers’ competitiveness to defend against low-priced imports, CSC has decided to decrease domestic steel prices by an average of 3.27%, or NT$ 646/MT for December sales (please see Table below).
It should be noted that some foreign steel mills export significant quantities of steel plates with extremely low prices to Taiwan which have been impacting our domestic market seriously for a long period of time. In order to defend our steel industry and keep business environment healthy, CSC will file an anti-dumping petition for steel plates soon.
Prices Adjustment for 2014 December Domestic Sales
Products
Adjusting Amounts (NT$/MT)
Plates
- 861
Bars and Rods
- 600
HRC
- 600
CRC
- 829
EG
- 600
ES
- 600
GI
- 600


Information Origin : http://www.csc.com.tw/CS/CSC_E/NC/neli/neli.aspx

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