China Steel Corp Increases Prices of Major Steel Products by NT$300 Per Tonne Domestically

China: China Steel Corp, the largest steel manufacturer in the nation, announced a major increase in steel product prices by NT$300 (US$9.71) per tonne for domestic deliveries in the upcoming month. The decision came because of the improving domestic demand for steel from makers of vehicles, computers, and servers due to the increasing adoption of artificial intelligence (AI) applications. According to a statement by the Kaohsiung-based steelmaker, domestic steel consumption is expected to recover from the trough as inventory correction is nearing an end. Moreover, the market outlook is positive, supported by the government’s NT$680 billion public infrastructure project, which is expected to further boost steel demand.

Steel expects market confidence to recover soon with inventories rebuilt and demand poised to emerge. As the steel market is still in the early stages of recovery, the company plans to raise steel prices moderately to reflect increases in raw material costs and foreign exchange rate fluctuations. According to China Steel Corp., global prices of coking coal and iron ore have already hit rock bottom and are expected to rebound. While the price of iron ore has been lingering at around US$105 to US$115 per tonne, the price of coking coal has recovered to between US$225 and US$235 per tonne, the company added.

China Steel has increased the prices of Hot-Rolled steel plates, Hot-Rolled steel coils, and Cold-Rolled steel plates by NT$300 per tonne, effectively ending two consecutive months of price reductions. Meanwhile, galvannealed steel coils used in construction have also seen a price hike of NT$300 per tonne, but China Steel has kept the price of galvannealed steel coils used in home appliances and computers, as well as that of electrical steel coils, unchanged. The price increase is in response to the global trend and rising demand in China's domestic market.

The company's recent price hikes were in line with similar upward adjustments made by other Chinese steelmakers, including Baowu Steel Group Ltd and Angang Steel Co. Both companies raised prices for Hot-Rolled, Cold-Rolled, and galvannealed steel by 100 yuan (US$14) per tonne for next month's deliveries, signalling a potential further increase in global steel prices during the second half of this year. The initial price increase by both Baowu Steel and Angang Steel after four months.

China Steel's pretax profit in the first five months of 2023 plunged 93% to NT$1.72 billion from NT$24.6 billion during the same period in the previous year. The company attributed the decrease to higher raw material costs and oversupply in the market. Despite this, China Steel recently announced that it will raise prices for major products due to strong demand and a tight supply chain.