China Steel Corp (CSC), the country’s largest steelmaker, said yesterday it would raise prices by 1.7% for next month’s shipments to reflect rising raw material prices.
The Kaohsiung-based firm said it will also increase its supply prices in the next quarter by 8.3 percent as market demand remains strong and production costs continue to rise.
According to him, CSC updates prices for products such as hot-rolled steel on a monthly basis, taking into account market conditions.
The company adds that prices for other commodities, such as automotive steel, are updated on a quarterly basis.
“Our principle is to set stable, soft, timely and balanced prices,” the company said in a statement. “We took into account the competitiveness of the steel industry, the cost of raw materials and the price pressure on steel companies.”
CSC said it expects strong demand in the future.
“Signs of a global recovery in production are clear,” the message said. “The demand for cars, infrastructure projects and home appliances is growing rapidly.”
“The World Steel Association predicts a 4 percent growth in global steel demand this year,” the CSC said.
On the demand side, companies have been slow to restore capacity to pre-COVID-19 levels.
“On the supply side, due to the impact of COVID-19 and extreme weather conditions, some blast furnaces in Asia and Europe have been slow to return to production,” the CSC said. “Along with the logistics disruptions, we saw serious delays.”
It says that Taiwan’s steel inventories in the downstream industry “are at their lowest level in years.”
The CSC referred to the high cost of raw materials such as iron ore, steel scrap and smelting materials, to an increase in average steel prices.
“The cost of iron ore at some point reached $ 178 per ton,” the company said. “This is not far from the all-time high of $ 194.”
“Around the world, steel companies continue to withstand the pressure of high raw material costs,” the statement said. “Moving on to the traditionally strong Q2 season, it is clear that there is room for steel products, which are priced quarterly, to get more expensive, especially when prices are much lower than monthly priced products.”
Monthly hot and cold rolled steel prices will rise by NT $ 450 per tonne each, while the cost of solenoid coils will rise in the range of NT $ 600 to 1200 per tonne, according to CSC.
For quarterly priced products, steel plates are expected to rise by NT $ 2,500 per tonne, hot rolled high carbon steel by NT $ 2,800 per tonne and automotive steel by NT $ 2,800 per tonne.