The Ministry of Economic Affairs has asked China Steel Corp (CSC, 中鋼) to ensure adequate supply to domestic customers, in a move to mitigate the effect of a potential trade war between the US and China, local media reported.
Minister of Economic Affairs Shen Jong-chin (沈榮津) was yesterday reported to have made a telephone call to CSC, asking the company to do its utmost to meet the demand of local steelmakers.
CSC, which counts the ministry among its major shareholders, has set a target of raising output at its six blast furnaces by 10 percent in response to possible steel shortages, the Chinese-language Economic Daily News said in a report.
“CSC is capable of producing 15 million tonnes of steel products per year if the six furnaces run at full capacity,” the newspaper quoted company chairman Wong Chao-tung (翁朝棟) as saying.
The firm also plans to buy steel from Japan and Vietnam, where it could acquire 1.2 million tonnes of steel slab and 2 million tonnes of hot-rolled steel products per year respectively, the report said.
US President Donald Trump last month signed an order under Section 232 of the US’ Trade Expansion Act of 1962 to impose a 25 percent tariff on imported steel and a 10 percent tariff on aluminum.
Government officials have said that a main reason Taiwan has not been exempted from tariffs announced by Washington is that some Taiwanese firms import steel and aluminum from China, which they process and sell to the US market.
To convince the US to exempt Taiwan from the tariffs, local steelmakers are being encouraged to increase domestic content in their products and rely less on Chinese steel and aluminum, and CSC is expected to play a major role in ensuring supply.
The US was Taiwan’s largest export destination for steel products last year, with sales totaling 1.15 million tonnes at a value of US$1.35 billion, official statistics showed.
Exports to the US include cold-rolled steel coils, coated steel rolls, welded steel pipes and cold-rolled stainless steel coils, Taiwan Steel & Iron Industries Association data showed.