Price Adjustment for 2016 December Domestic Prices
On October 19th, China Steel Corporation (CSC) held domestic price meeting for December shipments and announced the following statement:
The European Central Bank (ECB) maintains the loose monetary policy to avoid deflation. The turbulence caused by Brexit has gradually eased. The US presidential election and Fed’s year-end interest rate move have become the main factors behind economic strength. China’s September import and export are both down due to the proliferation of global trade protectionism. Chinese government continues to implement economic structural reform and boost domestic demand by stimulus packages. Taiwan’s September import and export keep declining but the latest economic monitoring indicator flashes a green light, signaling a stable economy. Both the index of Industrial production and producer's shipment for manufacturing sustain upward trend, indicating mild recovery in Taiwan’s economy. It’s expected that next year’s GDP growth will be better than this year.
The global steel demand growth of this and next year were revised and raised up by worldsteel to 0.2% and 0.5%, respectively, showing that demand has rebounded from the bottom. The recent surge of international coking coal prices has bring spot premium hard coking coal prices to FOB US$220-230/MT from FOB US$90/MT in early July. Steel production cost jumps up by about US$80/MT. Because of higher raw material costs, Asian integrated steel mills try to raise steel prices to reflect costs. Japanese mills are preparing to increase 4th quarter price by Yen 5,000/MT for domestic sales and targeting a total of at least US$100/MT increase for 2016.Q4-2017.Q1 export sales. Korean mills have announced the Won 60,000-80,000/MT price increase for 4th quarter domestic sales. Major steel mills in China, like Bao Steel, Wisco and Angang Steel, have raised domestic prices for 4 consecutive months since August. The cumulative increase is around RMB 200-610 /MT. Driven by the surge in steel production costs, main Asian steel mills are in aggressive stance to raise steel prices.
Supported by high raw material costs, steel prices globally are rising. However, considering that Taiwan’s steel downstream industries are export-oriented, a longer adjustment period is needed. In order to enhance competitiveness of steel-using industry as a whole, CSC has decided to slightly increase the prices of plates, HRC, CRC and GI for December deliveries. Prices are up by an average of 3.7% or NT$ 600/MT.
