Taiwan’s China Steel Corporation (CSC) declared that it hopes to improve the business situation affected by COVID-19, by the end of 2020 as demand for steel will gradually go up. The company made this announcement in its 8th annual meeting of Board of Directors held on June 19.
With improving economic activities and increased product development projects, the company hopes to recover from the losses made in the first and second quarter of 2020.
Taiwan observed a sharp drop in steel prices amid dampened global demand. Lockdowns in India and China also affected the company’s supply chain. CSC has thus decided to lower its dependence on India and China for raw materials and relying on the mass production of cheaper steel.
The company plans to focus on the production of top quality and high precision steel products, to maintain growth and stay relevant in the changing demand scenario in the export markets. Sale of such products is expected to make up 20pc of CSC’s revenue by 2024.
To grasp the business opportunities of offshore wind power, the Board of Directors approved a capital investment of up to $230mn (NTD6,800mn) for China Steel Power Holding Corporation with Copenhagen Infrastructure Partner (CIP). The funds would be used in developing a new wind farm in the early stage of development of ZhongNeng Project with a grid-connected capacity of 300MW.
The offshore wind power industry is highly steel-intensive and CSC aims to increase its roots in the country’s expanding energy sector.
The company is also focusing on developing products for the wind power and electric vehicle industries, following the footsteps of European steelmakers like Austria’s Voestalpine AG and Sweden’s SSAB AB.
In 2019, CSC set up a marine engineering subsidiary, Sing Da Marine Structure Corp, which specializes in producing jacket foundations used in wind turbines.
Outlook on steel prices positive
With the pandemic slowly coming under control, there are strong expectations of a rebound in market demand by the fourth quarter. Major steel companies have slashed production by 10 pc since the second quarter, including CSC, in an attempt to stem losses. Meanwhile, the prices of raw materials such as iron ore and coal increased. Citing recent price hikes from Chinese, Japanese and South Korean industry peers, CSC said market demand is showing signs of recovery.
($1 = NTD29.6)