China Steel Corporation (CSC), Taiwan’s leading steel producer has announced a price hike for its March finished steel sales by TWD450-2,500/mt ($16-89/mt) or on an average 2.5pc from February, according to the company’s release on Monday.
The company cited firm raw material costs and the expectation of better demand from steel end-users after the Chinese New Year holidays as reasons behind the price hike.
Positive economic outlook
The International Monetary Fund (IMF) raised the global economic growth rate for the year 2021 to 5.5pc in January from 5.2pc estimated in October 2019.
The Taiwanese economy is also expected to recover well in 2021 according to the National Development Council. Amid increased consumption and investment demand, the country’s GDP rose by 2.98pc in 2020. The vaccination drive for COVID-19 has been launched on a large scale in Europe and the United States and has improved global market sentiment.
High global raw material prices
Prices for major raw materials- iron ore and coal, have remained firm from 2020 through early 2021. In January, prices of iron ore ranged between $160-170/mt cfr China for 62pc Fe content amid tight supply. Australian climate factors impacted the spot price of metallurgical coal which rose almost 50pc fob Australia in 15 days.
CSC’s domestic sales prices for March 2020:
|CSC’s March domestic sales price hike|
|Products||Price hike in TWD/mt, M-o-M|
|Hot rolled steel sheet||700|
|Hot rolled material||450|
|Hot rolled general material||700|
|Cold rolled general material||700|
|Electromagnetic steel coil (medium-low gauge/high gauge)||2,000/2,500|
|Hot-dip galvanized steel coil building materials, baking paint||700|
Although it is easing out, there is still a shortage of containers in Asia. Freight rates have thus remained high. The high input cost for all major steel plants could support the steel market and maintain a stable development pattern, said the CSC steel in its release.
CSC’s hot and cold-rolled steel ex-works prices for February were lower by TWD1,400-1,800 than present spot levels, which gives it room for a raise.
Major steelmakers in China, Baowu steel and Anshan Iron and Steel have kept their flat steel prices unchanged after raising them in the earlier months. Prices for plated products have increased by CNY200-600/mt due to the cooperation to promote energy conservation and green energy policies. Demand is growing steadily, and the outlook for the automobile and home appliance industries is positive. Electromagnetic steel coils prices could stay bullish in China driven by the demand for electric vehicles.