Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Taiwanese steelmaker China Steel Corporation (CSC) has raised finished steel prices for Q1 2021 by TWD1,200-1,500/mt ($43-53/mt) from the prior set of prices amid high raw material prices and an uptrend in global steel prices. On average, CSC hiked prices by 6.1pc. Revised raw material prices, especially iron ore rose above $160/mt cfr China hitting a seven years’ high. For January domestic sales, prices rose TWD1,200-1,400/mt from the prior month.


On Dec 11, the steelmaker revised prices for the domestic market on positive business sentiment due to the successful launch of COVID-19 vaccine and strengthening economic activities globally. Also, considering the appreciation of the Taiwanese dollar against other currencies, which is also adding to end-users’ margins, CSC decides to steadily adjust prices. 


CSC’s steel sales price hike for Q1 2021
ProductsPrice hike in TWD/mt
Bar and wire rod1,500
Automotive usage1,200
CSC’s  price hike for January domestic sales
ProductsPrice hike in TWD/mt

Strong economic outlook

Organisation for Economic Co-operation and Development (OECD) forecasts the global economic growth rate at 4.2pc in 2021. Taiwan’s Directorate General of Budget, Accounting and Statistics (DGBAS) predicts an economic growth rate of 3.83pc for the country driven by infrastructure activities. Strong demand from infra is bringing back many steel mills’ to Taiwan and exports are also on a rise, said CSC explaining the pricing rationale. 


Recovery in auto, exports 

The global car sales were up by 2.3pc in October and the US new residential sales were at a seasonally adjusted annual rate of 990,900 units in October, up by 41.5pc from the prior year. Taiwanese total export reaches $51.6bn in October, hitting a record high. The demand from downstream industries has recovered faster-than-expected and inventory levels have fallen rapidly in Q4. The overall steel demand has shown a V-shaped recovery in the fourth quarter creating a gap between supply and demand.


High global HRC prices

With iron ore prices reaching a seven-year high at above $160/mt cfr China, international coking coal prices have also hit record highs. HRC prices in the US domestic market could reach $900-1,000/mt, while in Europe around $700/mt. Asian HRC import prices are at $650-680/mt cfr Southeast Asia with a room for improvement in the coming days. 


Chinese steelmaker, Baosteel hiked flat steel prices by CNY400-800/mt ($61-123/mt) for January shipments and other steel mills including Vietnam’s Formosa Ha Tinh are likely to follow the suit. 


($1=TWD28.15; CNY6.53)

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