China Steel Corp slashes domestic steel prices

China Steel Corp, the nation’s largest steelmaker, yesterday slashed steel quotation prices for domestic deliveries next month and next quarter as already sluggish demand worsened.

The Kaohsiung-based steelmaker is to cut prices next month by NT$800 to NT$1,200 per tonne, compared with cuts of NT$500 to NT$600 per tonne this month.

It is also to cut prices next quarter by NT$500 to NT$1,500 per tonne for most products, but would keep unchanged the price of SM570M-type steel plates for building use, it said in a statement.

“The global steel market remains weak. At home, the market is rife with wait-and-see sentiment, and firms in the supply chain are grappling with an industrial slump,” the company said.

“The company has decided to significantly lower our quotation prices to fend off competition from cheaper imports and match domestic market trends,” it said.

Global steel demand has shrunk amid a soft recovery in the manufacturing sector, especially in the US, the company said.

In China, Angang Steel Co reduced its price quotations of hot-rolled products for next month by about 200 yuan (US$28) to 250 yuan per tonne due to sagging demand, while China Baowu Steel Group Corp , the world’s largest, recently announced no changes in its price quotations for delivery next month, without providing clear order visibility for the near term, CSC said.

With an excess of cheaper Chinese steel goods entering regional markets, the prices of hot-rolled steel products in Southeast Asia plunged US$35 per tonne last month, the company said. Formosa Ha Tinh Steel Corp in Vietnam cut quotation prices by US$16 per tonne in its latest move to match weak market demand, it added.

CSC reported pretax profits of NT$582 million (US$18.22 million) for July, down 15 percent from NT$681 million in June.

During the first seven months of this year, pretax profits surged 218 percent to NT$4.08 billion from NT$1.28 billion in the same period last year. Consolidated revenue grew 1.2 percent annually to NT$217.6 billion during the period.

The company told investors in June that its bottom line would be better in the second half of this year than the first half, given that the final quarter of a year is usually the strongest season for the steel industry.