China Steel Corporation (CSC) hereby announces the following statement, regarding the forecast and sales price adjustments for the third quarter of 2023 as well as July 2023 shipment.

The global economy has been weighed down by factors such as the US interest rate hike, the Russia-Ukraine war, and China's slow recovery in the first half of the year. In June, the World Bank and OECD released their latest global economic outlook, revising the growth rate forecast for this year to 2.1%, and 2.7% from last year’s 1.7% and 2.6%, respectively. The world economy is expected to improve as energy prices fall and inflation cools off. In June, the Taiwan Central Bank stated that due to weak demand of manufacturing sector, the GDP is expected to be 1.72%. However, benefiting from the extension of tax breaks for bulk materials and energy, as well as tax rebates for energy-saving home appliances, Taiwan's GDP growth rate for this year can still reach 2.04%, as per the forecast by the Directorate General of Budget, Accounting and Statistics (DGBAS).

The recovery in China following the lifting of the lockdown is not strong enough to sustain its demand for steel, while the manufacturing momentum in Europe and the United States is slowing down. Nevertheless, it is expected that in the second half of the year, China will accelerate bond issuance to promote infrastructure and to further relax real estate policies. According to statistics released by the World Steel Association, global steel consumption in 2023 is projected to reach 1.822 billion tons, with a year-on-year growth of 2.3%. Meanwhile, Taiwan automotive market has shown excellent sales figures, and the advancements in AI and high-performance computing will drive related demands. Additionally, the Taiwan government has allocated a budget of 680 billion for public infrastructure projects, which will contribute to steel demand in the second half of the year.

The Chinese steel market haunted by oversupply problems, causing surging steel export volumes with dumping doubts. The supply side has started to adjust through capacity reduction and maintenance plans to reduce production. The National Development and Reform Commission of China has emphasized its efforts to control the production of energy-consuming industries. As a result, a total of 18 blast furnaces have been shut down for maintenance. China's crude steel production decrease to 90.12 million tons in May, representing a 6% reduction compared to the peak production of 95.76 million tons in March. At the same time, China's steel inventory has been steadily depleting, indicating an accelerated decline in inventory levels, nearing to the bottom point.

Since April, overproduction in Chinese mills has led to a successive downward revision of international steel prices. The excessive decline in steel prices has shaken market's confidence. To avoid further losses, Chinese mills have adjusted their export prices, and as the result, the prevailing market conditions stabilized and rebounded. Both Baowu Steel Group and Ansteel Group keep the prices flat for their domestic steel products of July shipment, sending a clear signal of price stabilization and strengthening the confidence of the market. When the market refocuses on the fundamental supply-demand dynamics, it indicates indication that the speculative activity of coal and iron prices is decreasing. The prices of ore and coal are fluctuating around $110-120 per ton and $220-240 per ton, respectively, indicating a potential stabilization or reaching a bottom in prices.

CBAM will enter into force in its transitional phase in October this year. To achieve the long-term goal of carbon neutrality by 2050, Taiwan will establish sub-laws related to climate change. With the imminent issue of carbon neutrality, CSC must collaborate with downstream customers to seize the green development opportunities.

For adjustment and competitiveness of downstream customers, CSC is implementing a gradual and cautious price adjustment strategy to ensure that its prices are aligned with the main steel price trend. The pricing for July and the third quarter will be determined based on the expectations of downstream customers and aligned with market trend. Steel prices are expected to rebound in July, as there is an anticipated recovery in demand. CSC expects that downstream customers can seize the opportunity to replenish their inventories at the low point and get ready for the next market rebound.

CSC hereby announces the price adjustments of domestic steel sales for the third-quarter of 2023/July 2023 shipments are listed as follows：