CSC Reports Pretax Profits of NT$1.499 Bn. for Jan. with Price Hike Pending

With a planned price hike for April and May still pending, Taiwan-based China Steel Corp. (CSC), the island's biggest steelmaker by size, scored pretax profits of NT$1.499 billion, or about NT$0.1 per share, in January, up 27% from a month ago to meet market expectations, according to the firm's latest financial report.

The report shows that the firm sold some 791,400 tonnes of steel to rake in consolidated revenue of NT$32.313 billion in the month, with operating profits of NT$1.679 billion, growing 8% month on month.

Meanwhile, CSC insiders seem to hold mixed views on continual raising its nominal prices of domestically sold steel for April and May after announcing a hike for March. It is reported that while a few directors advise the firm to deliberate on whether persistently rising steel prices will undermine downstream customers' competitiveness, most insisted that prices should be adjusted higher to keep pace with the current brisk recovery of the steel market in Asia and to safeguard the firm's profits.

It makes sense for the majority in CSC to agree on raising prices for April-May. Apparently more conservative about market prospects early this year, the firm decided to raise its nominal prices of hot-rolled steel—only once during the first quarter—by about US$15 per tonne for March, compared to downstream re-rolling companies, such as Yieh Phui Enterprise and Sheng Yu Steel, which have lifted export prices by over US$30 per tonne during the same period.

Although CSC has yet to decide to raise prices during the second quarter, lots of positive factors in Asia's steel market at present offer support for such move. For instance, Chinese steelmakers have effectively curbed output so far this year, in an effort to avoid oversupply that dampened the market last year. Besides, strong market demand in Japan has also helped lift local suppliers' export prices of hot-rolled steel to US$600 per tonne, compared to CSC's US$580-590. (SC)