On Nov 26th, China Steel Corporation (CSC) held domestic price meeting for first Quarter(January-March) domestic shipments and announced the following statement:
In the latest OECD Economic Outlook released on Nov.21, 2018,2019 Global GDP growth is projected to ease from previous projection of 3.7% to 3.5% due to headwinds from trade and political tensions. In the United States, consumption growth and the Fed's policy of raising interest rates remain solid. Economic growth of the Euro Zone is moderate, but long-term expansion continues albeit the turmoil of the Brexit. The Chinese economy is encountering headwinds but with government’s efforts on demand strengthening, monetary easing and exchange rate stability, the impact is less severe. Xi Jingping has shown a softening stance on G20 meeting, and the trade tension is expected to ease. Compared to China, Taiwan is less impacted by the US Section 301. With orders transferring from China to Taiwan due to Section 301, investment climate is getting better in Taiwan. In addition, ongoing infrastructure projects are coming, thusexport and industry growth remain strong currently.
In order to reduce the impact of growing difficulties in international trade,major steel producing countries are pushing ahead domestic infrastructure. China injects 800 billion RMB in its railway construction. India puts 30 billion for a smart city project. According to the latest(Oct/16) projection of worldsteel, steel demand is revised upward and estimated to reach 1.681 billion tons in 2019, increasing by 23 million tons compared to 2018, not to mention the Chinese steel capacity-cut policy is still undergoing yet.
The US sanctions against Iran and US makes Turkey’s Section 232 tariffs double to 50% lead to steel pricing turmoil worldwide recently, makingRussian, Turkey and Chinese suppliers sell off their stocks at extremely low prices and dragging down slab prices as well. However, due to high raw material prices’ levels and the quota reset of Section 232 next year, it is believed thatselling pressure is likely to ease sooner or later.
The main supports of Taiwan’s economic growth are capitalization and government investment. Taiwan plans to input 235.8 billion NTD in infrastructure, including new science-based industrial parks, postal logistic centers,Danjiang Bridge, andoff-shore wind power projects, to create strong demand for steel products like plates, fasteners, pipes and tubes. However, the domestic automotive industry and motor export business are facing severe price competitions from import cars and Chinese products, making many domestic industries more difficult to operate. CSC is the first mill to announce price decision of 2019Q1. It’s is important to carefully evaluate supply and demand so as to stabilize the Asian steel market.In order to keep downstream customers’ confidences and export competitiveness, as well as to make shipments smoother during Chinese New Year period, CSC decides to roll over the prices of plate, bar and rod, EG and decrease the prices of other products. 2019Q1 price adjustmentis shown below:
|
Prices adjustment for 2019Q1 Domestic Sales
|
|
|
Products
|
Average Adjusted Amounts (NTD/MT)
|
|
Plate
|
+0
|
|
Bars and Rods
|
+0
|
|
HRC
|
-300
|
|
CRC
|
-400
|
|
EG
|
+0
|
|
ES
|
-900
|
|
GI
|
-300
|