Announcement for Domestic Steel Prices for the First Quarter /January Shipments of 2024

2023-12-19

China Steel Corporation (CSC) hereby announces following statement, regarding the forecast and sales price adjustment for the first-quarter/January shipment of 2024.

The global economic environment remains stable. While inflation is predicted to decline steadily, the tightening monetary policy in Europe and the United States is anticipated to come to a halt, providing a relief in financing burdens. Thus, the OECD predicts that global GDP growth rate could reach 2.7% in 2024. Taiwan economic momentum is expected to benefit from the global economic upturn. The government's ongoing expansion of domestic public infrastructure, with a scale of 588.6 billion, is expected to stimulate private sector investment. Therefore, Directorate-General of Budget, Accounting, and Statistics revised upward the economic growth rate for next year to 3.35% (formerly estimated 1.42%) in November.

In terms of steel demand, the resolution of United Auto Workers strike is expected to lead to a recovery in steel demand for the automotive sector. Meanwhile, the Japanese government announced a stimulus package of 17 trillion yen (approximately $113 billion USD), providing measures such as cutting corporate tax and increasing wages to boost domestic demand. China continues to stabilize its real estate market by releasing 1 trillion yuan in bonds (approximately USD $137.2 billion) into construction, expected to support steel demand to recover. Global automotive production and sales recovered this year, and JD. Power predicted global production would reach 90.2 million in 2024, an increase of about 4% from 2023. Worldsteel revised upward the global steel demand growth rate for 2024 to 1.9% in October, estimating an increase of nearly 34.6 million tons compared to 2023, indicating that the global steel market would take a turn in 2024.

On the steel supply side, China's National Bureau of Statistics reported crude steel production of 79.09 million tons in October, a 13% decrease from the previous peak in June of 91.11 million tons. Social inventories decreased from the August peak of 122.1 million tons to 88.8 million tons at the end of November, a significant 27% reduction. Statistics show a substantial decline in both production and inventory in China. Lead time from U.S. steel mills has extended to eight to twelve weeks. European steel mills have shut down seven blast furnaces, and market steel prices would be supported by the suspension of part of their blast furnace capacity. According to Worldsteel statistics, global crude steel production was 150 million tons in October, a decline for the eighth month in a row, indicating global steel supply has been brought under control.

Regarding raw materials and market conditions, the iron ore price has risen to US$135-$140/MT, reaching a new high for the year. Coking coal price continues to rise as well due to the requirement for safety inspections for Chinese mines, production issues in Australia, and the strong demand from India, currently standing at approximately US$330-$340/MT. Benefited from demand for coal and iron ore, the BDI Index has surged to 2,500, a 135% increase from its early September low of 1,063. The rising cost of steelmaking has likely pushed steel prices upward. U.S. steel mills have consistently raised prices since October, with the North American hot-rolled EXW price rebounding by over US$400/MT (about a 64% increase). During the same period, the hot-rolled market in Europe had risen by over US$80/MT (about a 12% increase), stimulating European steel mills to raise price by US$44/MT at the beginning of December. Baosteel, Ansteel, and Benxi Steel announced to raise domestic flat steel prices by ¥100-200 RMB/MT (about US$14-28/MT) for January 2024 shipments, marking the seventh consecutive month of price hike. Apart from domestic market, Chinese steel mills raised export prices by US$40-$50/MT, driving the rebound of steel prices in Asia.

The global steel industry has undergone a year-long adjustment, and inventories of downstream users have dropped to a relatively low level. It is expected to see a trend of stability in the 1st quarter of next year, compared with 2023. In response to the sustained surge of cost and global market price, CSC plan to moderately adjust domestic price of January shipment. For the first quarter, CSC would make adjustments based on downstream industries condition individually, to align with the needs from different circumstances. This approach aims to balance the competitiveness of downstream customers in securing orders while aligning with international market conditions.

In response to the global net-zero carbon emission trend, China Steel Corporation has recently produced Taiwan's first batch of steel materials that comply with the “carbon neutrality declaration”. This move is expected to enhance the competitiveness of downstream industries and to create new opportunities for green transition. The company will continue to work with Taiwan's steel industry to advance together toward a low-carbon transformation in the supply chain.

CSC hereby announces the price adjustments of domestic steel sales for the first-quarter and January shipments of 2024 as listed below：

Offer Basis	Products	Average Adjusted Amounts (NTD/MT)
January shipment	HR Plate	+500
	HR	+500
	CR	+500
	EG	+500
	GI (Constructing)	+700
	GI (Appliances)	+500
	ES	+500
Products	Products	Average Adjusted Amounts (NTD/MT)
First-quarter shipment	Plate	+800
	HR Plate	+500
	Bar and wire rod	+800
	HR (Medium-High Carbon, Tooling)	+500
	CR (Medium-High Carbon, Tooling)	+500
	CR (Drum)	+500
	Automotive usage	+500

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

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