Taiwan's CSC lifts flats export prices to Japan

China Steel Corp (CSC), Taiwan's top steel producer headquartered in Kaohsiung, is asking its Japanese customers to pay an extra Yen 15,000/tonne ($115/t) for its hot-rolled coils (HRCs) for shipments during next quarter (May-July delivery) to offset rising costs and in view of price hikes steelmakers elsewhere are pushing through for their flat products.

The Taiwanese mill began talking with its Japanese customers this week, Mysteel Global understands, arguing that its margins have worsened, and that prices elsewhere are rising.

This week for example, China's Rizhao Steel raised its prices of commodity grade hot coils by $5/t to $685/t FOB while Baosteel and Anshan Iron & Steel raised their domestic prices of HRCs for April shipment, as reported. South Korea's POSCO has also raised its domestic offer prices of HRCs by KRW 50,000/t ($38) for March shipment.

For its part to domestic customers, CSC has decided to raise the list prices of its major steel products by TWD 800-2,000/tonne ($26-65/t) for sales in the second quarter, mainly due to higher production costs, as Mysteel Global reported. For April, the integrated mill has lifted its HRC price by TWD 1,000/t from March.

On the most recent data from the Japan Iron & Steel Federation, Japan imported 40,860 tonnes of HRCs from Taiwan in January, down by 6% from December though this was higher by 21% from January last year. During the period April-January, Japan imported over 409,000 tonnes of Taiwan-origin HRCs, higher by 24% on year, the data show.

Japanese steelmakers are also raising their domestic prices, so CSC should face limited resistance in its quest for higher prices. However, CSC sells its products to Japan priced in yen, and the Japanese currency's recent strength against the US dollar may create issues during negotiations with Japanese buyers.

Since March 8 for example, the yen has strengthened from Yen 138=$1 to reach Yen 131 on March 29, and Japanese customers could argue that in the past few weeks alone, the Taiwanese mill would have earned 10% more in dollar terms just because of the exchange rate.

Written by Russ McCulloch, russ.mcculloch@mysteel.com

Note: This article has been written in accordance with an article exchange agreement between Mysteel Global and SteelMint.