Taiwan’s China Steel Corporation (CSC) has hiked flat steel prices for November deliveries by 5pc or NTD1,100/mt ($38/mt) effective Oct 13. The company expects domestic demand to recover and stay strong in Q4 FY2020. Steel prices for November deliveries rose by upto 5pc from October deliveries.
CSC anticipates global steel prices to remain stable and has ruled out a significant fall in Q4 as most economies return to normal post-COVID-19 pandemic. Demand from the auto industry is gradually picking up. The company expects steel prices to extend gains even in December amid increasing demand.
HRC prices for November deliveries rose by NTD1,000‑1,200/mt ($35‑42/mt) ex-works and CRC by NTD1,200/mt ($42/mt). Prices for Hot-dip galvanized steel HDG rose by NTD1000/mt ($35/mt) from October. Earlier, CSC had increased prices of plates, rebar, wire rods, and other steel products on a quarterly basis by NTD500‑1,000/mt ($17‑35/mt) for Q4 deliveries.
|CSC Steel’s November deliveries prices|
|Products||Price hike in NTD/mt on M-o-M|
|Hot-rolled steel sheet||1,100|
|Hot-rolled general material||1,200|
|Cold-rolled general material||1,200|
|Electromagnetic steel coil||1,200|
|Hot-dip galvanized steel coil building materials, baking paint||1,000|
Why did CSC hike prices?
CSC explained its pricing rationale stating that the Purchasing Managers Index (PMI) for manufacturing continues to rise, globally and economies are gradually recovering from the impact of COVID-19 pandemic. Thus, the global steel market is on a recovery path.
International trades in Europe, America, India, Southeast Asia, Japan, South Korea and other regions are gradually rising.
Though Baowu Steel has adjusted its hot-rolled steel prices for November due to previous cumulative increases, short term prices are likely to remain strong. Recovery in Chinese steel prices post-Golden week holidays and the announcement of winter production cuts ahead of schedule bodes well for the Chinese steel industry.
On the other side, the price of hot-rolled HRC steel has increased above $700/mt in the US, reflecting a recovery in steel consumption after the market floundered amid the COVID-19 pandemic, said in the company statement.
In Taiwan, the demand from steel consuming industries remains on an uptrend as construction, bicycles, automobiles and motorcycles industries have rebounded significantly. CSC has received a higher number of orders for Q4. The increase in production of the major mills drives demand for raw materials, coal and iron ore and the higher cost of raw materials supports higher steel prices. Domestic steel market in Taiwan was supported by favourable policies which stimulated downstream demand and effectively drove the market up, said company officials.
The price hikes for domestic steel products in November also accounts for costs incurred due to market closures in September and the impact of the appreciation of the Taiwan dollar on exports of downstream industries.