China Steel Corp., Taiwan's largest steel producer by revenue, said cutting costs will top company goals this year as concerns over excess supplies from China continue while the global economic outlook remains murky.
Speaking at the annual shareholders' meeting Wednesday, Chairman Tsou Jo-chi underscored China Steel's renewed dedication to its renewable-energy business.
Steelmakers around the world are shifting away from low-margin crude steel, cutting prices, slashing capital expenditures, freezing expansion plans and seeking to diversify revenue sources in the face of overcapacity--particularly in China--and relatively slow growth in global demand.
China Steel--the world's No. 25 steelmaker by annual capacity, at 14.3 million tons--expects sales this year to be down 2.3% from 2013, to 9.26 million metric tons from 9.48 million, Mr. Tsou said. The company said late last year that it would freeze overall capacity this year.
The company posted a net profit of 3.63 billion New Taiwan dollars (US$120 million) in the first three months of 2014. Last year, its net profit was NT$15.98 billion on revenue of NT$347.83 billion.
Mr. Tsou said he expects steel capacity in China to rise to between 810 million and 820 million metric tons this year, from about 779 million in 2013. Excess supply in China, the result of growth in steel mills that began in the 1990s, has weighed on global steel prices in recent years.
Source: MArket Watch
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