Price Announcement for 2015 June Domestic Prices

2015-07-28

On July 17th, 2015, Taiwan’s China Steel Corporation (CSC) held the domestic pricing meeting for September 2015 delivery, and announced the following statement:
On global economic perspective, US economy has backed on track from sluggish in the first quarter, while industrial production and employment were still lower than expected. Inflation remained low, and Fed lowered GDP outlook in2015 and might delay the time for rate rising. Greek and EU have reached bailout agreement, which temporarily lifted the crisis of Greek’s withdrawal from EU. Carried by weak euro and loose monetary effect, the Eurozone might maintain its growth momentum. China’s GDP growth in Q2 managed to keep at 7%, export and PMI data recovered moderately, while there’s volatility in the stock market along with weak domestic demand. Chinese government continued to lower interest rate and enhanced stimulus program in response. Overall, affected by slowing economic growth in emerging countries and US, IMF revised global economic growth rate down by 0.2% to 3.3%; however, benefited by factors such as monetary easing and low oil price, global economic growth looks forward to turning stable in the second half.
Slow recovery in global economy along with traditional off-season in the third quarter, has led to weak demand for steel. Moreover, recent price volatility in iron ore resulted in falling in international steel price. US mills, manage to raise steel prices, but market prices remain depressed, due to huge decreases of demand in energy sector. With flat demand in Europe and insufficient reduction of output, steel price lingers at low levels. In Asia steel market, decreasing automotive and construction needs in China, yet-to-be-improved excess inventory and oversupply, and continuous falling domestic steel price, led to lower price in August delivery. Most of the mills around the world are facing serious loss, which mean there’s only limited room for steel price to drop. With international economic instability vanishing and needs for stock replenishment recovery in Q4, steel price may hit the bottom in the near future.
Domestic downstream mills face uncertainty risks like continuous international steel price fall, seasonal demand decreases and regional trade barriers. With buyers’ wait-and-see attitude, it’s hard to get export orders in the market. To improve downstream clients’ competitiveness and overcome difficulty, CSC decided to lower domestic price of steel product by 6.14%, down by NTD983 per ton in average.
Facing unfair trade practices like subsidies and massive export with low price from China, many countries have filed anti dumping petitions in response. Meanwhile, mills in South-East Asia cut price to get orders, making the export price to Taiwan drops drastically, which also severely injured Taiwan steel market and downstream industry. To defend a healthy steel market in Taiwan, CSC seriously accuse such unfair behavior, and the chairman has decided to propose unfair trade administrative procedure, starting by steel plate and then the rest of other steel products.
Adjustments (NT$ /MT)
Plates    -561
Bars and Rods    -949
Hot-rolled Sheets/Coils    
Cold-rolled Sheets/Coils    -729
Electro-galvanized Sheets    -500
Electrical Sheets    -673
Hot-Dip galvanized Sheets    -732

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

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