Price Announcement for 2015 April and May Domestic Sales

2015-02-26

On Feb 26th, 2015, China Steel Corporation (CSC) held the domestic pricing meeting for 2015 April and May shipments and announced the following statement:

From the global economic perspective, due to the benefit from appreciation of US dollar and energy price fall, US consumer confidence has reached a new high, and economy keeps strong growth. As Fed is unlikely to change its loosening monetary policy, it is expected that US’s economy would continue to expand. European Central Bank (ECB) will start QE implementation in March 2015, and it would ease deflation in the euro zone. Besides, Greek debt bailout extension and ceasefire between Russia and Ukraine would gradually stabilize the euro zone’s economy. As to Asia, affected by the slowdown of orders and weak demand in both overseas and domestic markets, China’s PMI dropped below 50 in January, and the indexes of import and export both went down. In order to stimulate the market, People’s bank of China has cut down its interest rate and provided more supports for micro and small enterprises, agricultures and water conservancy construction projects. In Taiwan, driven by low oil prices, investment and consumption are expected to increase. Directorate-General of Budget, Accounting and Statistics (DGBAS) has revised upward GDP growth to 3.78% for 2015, and expected the economic performance of this year would be better than that of last year.

Since the economic recovery has slowed down and steel demand keeps sluggish, international steel prices have dropped significantly. Influenced by influx of cheap imports and high inventory, price fall in US market becomes more severe and some plants have started to reduce production or stop for maintenance. In European market, as the demand is still weak, steel prices failed to rise in January. However, it prevented steel price from falling again. After China removed the tax rebate for part of the boron-added steel export, excess steel products have turned back to its own domestic market. Besides, since steel makers and traders undersold the inventory due to the off-season effect and the coming Chinese New Year, domestic steel price fluctuated violently, which also caused price fall in Asia market. However, price of coal and iron ore has bottomed out and kept stable recently. Current steel price has approached steel mills’ cost. The demand improvement, fueled by global Quantitative easing policy and the increase of consumption and investment, is expected to prompt steel price to bounce back.

Influenced by weak demand and steel price plunge in international market, domestic downstream industries have difficulty in booking export orders. In addition, domestic price keeps sliding due to cheap imports from China and South Korea. In order to strengthen downstream steel makers’ competitiveness and expand their export orders, CSC has decided to decrease steel price overall by an average of 5.2%, or NT$ 1,008/MT for April and May sales. Details are listed below. 
Prices Adjustment for 2015 April and May Domestic Sales
Products    Adjusting Amounts (NT$/MT)
Plates    - 906
Bars and Rods    - 1000
HRC    - 1124
CRC    - 895
EG    - 900
ES    - 626
GI    - 806


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

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