Taiwan's CSC cuts steel list prices for Feb sales

China Steel Corp (CSC), Taiwan's largest steel mill headquartered in Kaohsiung of South Taiwan, has decided to cut its list prices of major steel products by as much as TWD 700/tonne ($25.4/t) for local sales in February to ease the pressure downstream steel users face, according to a company release on January 14.

"Most of our customers still need to sell in overseas markets after processing, and port congestion has not yet improved, leading to the accumulation in their stocks at hand and putting more pressure on them," CSC said.

Besides, the Omicron variant of the COVID -19 virus is spreading fast in Taiwan, and the Taiwanese currency has risen to a nearly 25-year high, both of which are not conductive to helping Taiwan's exports, the company release showed. These persuaded the steel giant to lower its list prices again in February to help downstream customers win more orders and improve their competitiveness in global markets, the firm indicated.

The decision to cut prices further does not mean that CSC is pessimistic about steel demand and prices in the coming term, it stressed. "Steel demand for oil well tubing, for example, is expected to see substantial growth thanks to increasing international oil prices," CSC pointed out.

Moreover, the tightness of steel supply is unlikely to reverse in the near term, it said. For 2022, the crude steel output in China is estimated to be lower than that for 2021 due to central authorities' production restriction measures for achieving 'carbon neutral', plus the dual controls on energy consumption and the Winter Olympic Games near Beijing, CSC said.

South Korean steel giant POSCO also decided last December to permanently shut the No.1 blast furnace at its Pohang works, which may reduce the supply of crude steel in Korea by about 1 million t/y. POSCO's No.4 blast furnace in Gwangyang will also undergo maintenance for four months in the first half of this year, CSC said.

Moreover, iron ore prices in the global market continue to climb higher, lifting the production costs of steelmakers and lending some support to steel prices, CSC noted.

Steel prices globally have shown some signs of stabilizing recently. For example, Baoshan Iron & Steel, the listed arm of China Baowu Steel Group, has rolled over its hot-rolled coil list prices for the second month for domestic sales in February.

As for Taiwan, the total export value for 2021 came in at $446.4 billion, marking the highest on record. For this year, Taiwan's economic growth rate is forecast to reach 4.1% against the 6.1% for 2021, according to CSC.

Overall, Taiwan's economic growth is expected to remain steady, though the follow-up development will depend on the advance of COVID-19 worldwide, the restructuring of international supply chains, and whether the bottleneck impacting transportation capacity can be resolved, the company predicted.

Written by Nancy Zheng, zhengmm@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.