Source: CENS, June 8, 2009
China Steel Corporation (CSC), Taiwan`s largest integrated producer of steel products, is expected to raise hot-rolled steel prices by NT$1,000 (US$30.67 at US$1:NT$32.6) per metric ton on June 10 when it releases the wholesale prices for such product, with the rise being the first rebound in nine months. The price hike for hot-rolled steel is seen as reasonable and acceptable.
CSC said it won`t totally digest the high-priced iron ore in inventory until September, despite a 33% to 44% decline in price for the raw material. The company noted it won`t begin using the cheaper iron ore until the fourth quarter of this year.
Although the tangible effects from the reduction in production costs due to the price slump in raw materials are limited, market confidence has recovered with the supply shortfall for hot-rolled steel.
An institutional investor estimated that CSC lost NT$200 million (US$6.13 million) daily in the fourth quarter of last year. But the operating losses shrank to only NT$80 million (US$2.45 million) daily in the second quarter of this year. CSC will likely see improving climate for the next few months, despite not being able to make profits for the whole of this year.
CSC will raise the wholesale prices to NT$14,800 (US$455) from NT$13,800 (US$424.6) per metric ton for hot-rolled steel to be delivered in July. With the lower iron-ore prices, CSC will see production costs for hot-rolled steel stand at US$425 per metric ton.