Taiwan's China Steel Raises Prices by 12.1%

Taipei, March 4, 2011 (CENS)--The increased production costs driven by spiking prices of raw materials has forced China Steel Corp. (CSC), Taiwan's largest integrated producer of steel products, to raise prices by an average of 12.1% for products to be shipped in April and May. Industry insiders believe prices will continue to rise.

The price hike by CSC will pressure local downstream steel firms, including ones engaged in shipbuilding, automobiles, home appliances and hand tools, in terms of higher production costs.

CSC said it will gradually raise product prices to offset the impact of rising prices in raw materials. Institutional investors predicted CSC will very likely challenge first-half earnings to exceed NT$15 billion.

Domestic downstream steel firms are enjoying influx of orders due to the recent depreciation of local currency against the U.S. greenback after moving up for a period of time. Seeing the prosperous downstream firms, CSC has resolved to largely raise product prices to reflect the continued rise in raw-material prices.

According to an analysis made by CSC, the major steel makers in China have been raising product prices for three months in a row. In addition, Japan's major steel makers with blast furnaces have also raised product prices by between US$150 and US$200 per metric ton for the products to be shipped in the second quarter.

An industry analyst predicted the selling prices for hot-rolled steel coils will stand at over US$1,150 per metric ton by the end of this year, representing a 40% hike from present prices.