China
Steel Corp, the nation’s largest steelmaker, yesterday said it would cut
domestic steel prices by 2.1 percent on average for delivery next month in
response to a brief slowdown in steel demand and to help customers mitigate
mounting manufacturing costs caused by geopolitical issues.
However,
the company said it expects steel demand to pick up in the second half of the
year, benefiting from infrastructure programs in China, as lockdowns there
could gradually be lifted later this year, as well as post-war reconstruction
projects, if Russia’s war in Ukraine stabilizes.
The
Kaohsiung-based company’s move matches its Chinese counterparts’ recent
downward price adjustments, it said in a statement.
China’s
Baowu Steel Group Croup Ltd and Angang Steel Co lowered their steel prices by
up to 200 yuan (US$29.45) per tonne, as demand in Asia plunged during the rainy
season and in the month of Ramadan, China Steel said.
Formosa
Ha Tinh Steel Corp in Vietnam is likely to follow suit, it added.
The
World Steel Association recently trimmed its forecast for global steel demand
this year to an annual increase of 0.4 percent, or 1.84 billion tonnes, down
from an earlier estimate of 2.2 percent growth, China Steel said.
As
a result, the steelmaker said it is slashing prices by NT$300 to NT$500 per
tonne for steels used in a wide range of areas from construction to computers
and vehicles.
However,
the price of hot-rolled steel coils would remain unchanged, given robust demand
for American Petroleum Institute steel pipes for oil and gasoline transmission
systems, it said.
As
European nations plan to stop importing oil from Russia because of its invasion
of Ukraine, demand for US shale oil may climb, leading to increased demand for
oil transmission pipes, China Steel said.
“The company decided to adopt a stable pricing strategy, considering that local
downstream steel companies are facing … high commodity costs due to
geopolitical tensions. Besides, the COVID-19 pandemic has upended global supply
chains and propped up logistics costs,” China Steel said.
“To
enhance customers’ competitiveness, the company decided to cut steel prices,”
it added.
Based
on China Steel’s price adjustment plan the price of hot-rolled plates,
hot-rolled coils and cold-rolled coils would drop by NT$500 per tonne. The
price of hot-dipped zinc-galvanized steel coils used in construction and baking
finish would also fall by NT$500 per tonne.
The
price of galvanized steel used in home appliances and computers, and electrical
steel rolls would decline by NT$300 per tonne.
Source: Taipei Times