Prices Announcement for Domestic Sales in the Second Quarter of 2017
2017-03-07
Prices Announcement for Domestic Sales in the Second Quarter of 2017Date：2017/03/07
On February 24th, 2017, China Steel Corporation (CSC) held a domestic price meeting for the second quarter domestic sales and announced the following statement:
The US government carried out new policies like fiscal expansion and infrastructure reconstruction, expected to stimulate its domestic demand and to motivate its economic growth momentum. Euro zone quantitative easing monetary policy made its economic growth better than expected. Japan maintained its negative interest rate stimulus policy, which moderately recovered its economic confidence. China continued to expand private investment and fixed capital expenditure, keeping its economic growth steady. IMF (International Monetary Fund) forecasted that 2017 global economic growth rate would be 3.4%, 0.3% higher than the last year’s, and also adjusted that up for all the developed countries. Benefitted from the global economic recovery, Taiwan performed well on export and industrial production; moreover, the government budgeted trillions of NTD on expanding public infrastructure investment, and therefore DGBAS (Directorate General of Budget, Accounting and Statistics) has raised 2017 domestic economic growth rate by 0.42% to 1.92%.
The US “Railway, Public facilities and Infrastructure” construction, China’s ” One Belt, One Road” development and the demand for the Olympics construction in Japan all drove steel usage internationally, and are expected to trigger new bloom of global steel demand; in addition, China reinforced supply-side reforms such as eliminating all low-quality steel products, which helped to improve global overcapacity situation. Recently, the rebound of coking coal price and sharp increase of iron ore price, compelled main mills to raise steel price to cope with high production cost, and the price increase has exceeded USD 100/MT within this six months. Take Boasteel(China mill) for example, its steel price has risen by over USD 117~310/MT, and continues to go up in April. The main mills in Japan and Korea raised their HRC export price offer significantly to CFR USD 580~600/MT, expected to support another international steel price hike in the second quarter.
With international steel price rising substantially, domestic steel market turned affirmative, and steel price are expected to go up again. Considering China Steel Corporation‘s (CSC) price was significantly behind the international market, and CSC still faces pressure of high material cost, there should be substantial room for price increase; however, considering downstream competitiveness and their capability to transfer costs to their customer, CSC decided not to fully reflect cost but only moderately refer to international market, and raise the prices for domestic sales in the second quarter by NTD 1,396 /MT in average, that is 6.9%.
Prices adjustment for 2017 2nd Quarter Domestic Sales
Products
Adjusting Amounts (NT$/MT)
Plate +939
Bars and Rods +1,200
HRC +1,495
CRC +1,552
EG +1,200
ES +2,600
GI +1,600
Information Origin : http://www.csc.com.tw/CS/CSC_E/NC/neli/neli.aspx
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