China Steel Corp, the nation’s biggest steelmaker, yesterday announced sweeping price cuts by NT$600 per tonne for domestic delivery next month in response to customers’ conservative demand prospects as they grapple with volatility in foreign exchange rates.
The Kaohsiung-based company’s move came after sharp appreciation of the New Taiwan dollar versus the US dollar is posing a risk to the nation’s export growth momentum, although the nation’s economy is showing resilient growth toward an annual expansion of 2.9 percent this year estimated by the IMF, the company said in a statement.
“Customers are adopting a wait-and-see approach recently, as the downstream processing industry is taking hit from dramatic revaluation of the NT dollar lately,” China Steel said. “To help downstream steelmaking customers safeguard their competitiveness in taking new orders, the company is cutting prices extensively for June deliveries.”
The downward price adjustments on the company’s major products aligned with the weakening steel prices in Asia, such as Angang Steel Co in China lowering prices for certain steel plates recently and Formosa Ha Tinh Steel Corp in Vietnam trimming hot-rolled steel prices by US$17 per tonne during its latest price quotes, China Steel said.
At the same time, there are signs that demand in the US and European markets is sliding, while costs of raw materials, including iron ore and coking coal, hold steady at between US$95 and US$100 per tonne and in the range from US$185 to US$195 per tonne respectively, the company said.
Source:Taipei Times
