cens logo

CSC of Taiwan Likely to Slash Nominal Steel Prices for June Amid Market Doldrums

Apr 17, 2015 | By CENS

Compiled by STEVE CHUANG

With the recent collapse in international prices of iron ore causing a domino effect in the global steel market, along with downsizing of U.S.'s shale gas and cruse oil exploration industries due to record-setting low oil prices, Taiwan-based China Steel Corp. (CSC), the island's largest steelmaker by capacity and size, is on the brink of slashing its nominal prices of steel products for June, according to industry sources.

news-photoCSC will reportedly cut prices on its steels for June, with production of CSC’s steel coils shown. (photo courtesy of Money.udn.com)

Cheaper steel prices from CSC are believed to be just around the corner. One source of a Taipei-listed steel firm said CSC will certainly adjust downward its steel prices in the months ahead because the global steel market is turning increasingly grim, especially when international prices of iron ore has since last year continuously dropped, to US$47 per tonne as reported April 14, and is expected to bottom at US$35 this year by the government of Australia, world's largest supplier of the raw material.

Mainly due to a supply glut, J.P. Morgan has just cut its price forecast of iron ore for 2015 from the originally predicted US$63 per tonne to only US$51, with a quarterly average of US$43 and US$47 for Q2 and Q3, respectively. In fact, the market observer has also adjusted downward its long-term forecasts from 2015 through 2018, suggesting lingering doldrums to be seen in both the market and global steelmaking industry.

Taiwan's major re-rolling mills, including Yieh Phui Enterprise Co. Ltd., Sheng Yu Steel Co., Ltd. and Prosperity Tieh Enterprise Co., Ltd., all have felt global market demand for steel having significantly slackened, based on the fact that their production capacity for May through June have hardly been booked, despite export prices of their galvanized steel coils, aluminum-zinc coated steels and pre-painted steels having been cut to comparatively low levels of US$520, US$550 and US$800, respectively, per tonne.

Weak international steel price further confirms the gloomy climate in the market. For instance, a director from a Taiwanese steel mill said that export prices of hot-rolled steel by China's major steelmakers to Korea and Southeast Asia have slid to US$370 per tonne so far, while those of exports by Taiwanese re-rolling firms have also dived to only about US$365-370 per tonne on average.

Double WhammyA double whammy for Taiwan's steel industry is the abrupt decline of manufacturing industries in the U.S. According to a news report by the Wall Street Journal on April 15, the country's industrial production dived 1 percent year-on-year (YoY) in Q1, 2015, the first decline since September 2009. Meanwhile the Federal Reserve Bank of Atlanta published U.S.'s seasonally adjusted GDP growth rate of only 0.2 percent for Q1, far lower than the originally forecast 2.0 percent in early-February. ISM (Institute for Supply Management) reported the country's manufacturing PMI (Purchasing Managers Index) dropped to 51.5 in March, a nadir since last January. It is reasonable to say such disappointing performance owes largely to the country's rapidly downsizing shale gas industry due to record-low oil prices, which has had a snowball effect on Taiwanese steel suppliers.

A Taiwanese executive of a Taipei-listed steel mill said that a shale gas well is typically equipped with 2,000-3,000 tonnes of OCTG (oil country tubular goods) pipes. But, due to plummeting international crude oil prices, 891 wells out of 1,931 that existed last December nationwide have been shut down at the end of this March, representing a 46 percent-plus reduction. This, the executive indicated, has led to oversupply of hot-rolled steel, the material for OCTG pipes, and a drastic price drop of steel, particularly hot-rolled steels.

news-photoLayoffs and cutbacks in new projects by shale gas explorers in the U.S. are partly responsible for sluggish demand for hot-rolled steels. (photo courtesy of UDN.com)

Biggest Price Cut in 6 YearsIn the face of market inertia, industry insiders widely expect CSC to sharply cut its nominal prices of steels for June, perhaps by over NT$1,200 (US$38.09) per tonne on average, the steepest drop over the past six years.

One main reason they believe among others for such a big price cut is CSC's comparatively higher steel prices. Presently, the firm's price of hot-rolled steels, for example, stands at US$450-460 per tonne, around US$80 higher than market averages, which, in turn, undermines competitiveness of Taiwan's re-rolling firms in the global market.

Earlier, insiders said, CSC met local downstream manufacturers to discuss new steel prices to be applied in June, and will reportedly adjust downward prices of all its product categories.

Based on the current market situation, insiders engaged in hot-rolled steels said that CSC will likely cut its prices of such products by US$40 per tonne, for a continuous drop of 5.5 percent from that for April-May, when its overall steel price was 5.2 percent lower than that for March. The expected price reduction is regarded acceptable for CSC and downstream makers to sustain profitability, the insiders stressed.

CSC scored consolidated revenue of NT$27.817 billion (US$883.07 million) for March, up 18 percent month-on-month but down 11.8 percent YoY, with sales of some 810,000 tonnes, 170,000 tonnes more than February. For Q1, the firm's consolidated revenue totaled NT$80.803 billion (US$2.56 billion), down 12.57 percent yearly.


Industry In-Focus

Latest Chinese-U.S. Trade Talks Mark Chance of Higher-Level Meetings and Ease Market Tensions</h2>

Latest Chinese-U.S. Trade Talks Mark Chance of Higher-Level Meetings and Ease Market Tensions

Jan 14, 2019

The world waited with bated breath as Chinese and U.S. representatives met during this week to deliberate over whether the trade war would finally come to a reasonable conclusion. Throughout the entirety of the trade war early last year, from escalation to the tentative 90-day truce borne from the G20 Summit in Argentina between President Xi Jinping and U.S. counterpart President Donald Trump...


Taiwan Firms Kicks off 2019 at ArabPlast </h2>

Taiwan Firms Kicks off 2019 at ArabPlast

Jan 10, 2019

The biannual ArabPlast 2019 is marked as the most indicative benchmark as the largest trade expo for plastics, petrochemicals and rubber industry in the MENA region. The show kicked off on Jan. 5, attracting 336 exhibitors from 27 countries. Taiwanese exhibitors also attended, led by Taiwan Association of Machinery Industry in a 34-member strong delegation, a size just shy of China and India. ...


ARTC Teams Up With 18 Companies to Form Self-Driving Vehicle Union</h2>

ARTC Teams Up With 18 Companies to Form Self-Driving Vehicle Union

Dec 28, 2018

November 20 marks a huge milestone in Taiwan’s self-driving industry. The Automotive Research & Testing Center (ARTC) joined hands with 18 brands, including Acer ITS Inc., Global UniTek, Shin Wei Automotive Industrial and others of Taiwan’s top-to-bottom industrial chain to form the Autonomous Vehicle Industry Alliance. Their overall aim is to shore up support for a new, innovative operation m...



Industry Reports

Latest Chinese-U.S. Trade Talks Mark Chance of Higher-Level Meetings and Ease Market Tensions</h2>

Latest Chinese-U.S. Trade Talks Mark Chance of Higher-Level Meetings and Ease Market Tensions

Jan 14, 2019

The world waited with bated breath as Chinese and U.S. representatives met during this week to deliberate over whether the trade war would finally come to a reasonable conclusion. Throughout the entirety of the trade war early last year, from escalation to the tentative 90-day truce borne from the G20 Summit in Argentina between President Xi Jinping and U.S. counterpart President Donald Trump...


ARTC Teams Up With 18 Companies to Form Self-Driving Vehicle Union</h2>

ARTC Teams Up With 18 Companies to Form Self-Driving Vehicle Union

Dec 28, 2018

November 20 marks a huge milestone in Taiwan’s self-driving industry. The Automotive Research & Testing Center (ARTC) joined hands with 18 brands, including Acer ITS Inc., Global UniTek, Shin Wei Automotive Industrial and others of Taiwan’s top-to-bottom industrial chain to form the Autonomous Vehicle Industry Alliance. Their overall aim is to shore up support for a new, innovative operation m...


An Alliance Between Ford and VW Could be Announced as Early as Next Year</h2>

An Alliance Between Ford and VW Could be Announced as Early as Next Year

Dec 11, 2018

There is news of a far-reaching alliance between Ford Motor and Volkswagen, according to those familiar to the matter, reported CNBC. The two world’s largest automakers plan to announce the alliance next January, a partnership that would encompass sharing assembly plants in the U.S. to avoid new the wave of tariffs, joint marketing and distribution as well as product development, possibly on t...



Supplier News

Antrc Industrial Corp. offers bumpers, parts, decoration strips, skid plates, radiator, radiator grill, headlights and rear lights and will be exhibiting at Automechanika Shanghai to tap into the Asian markets. (photo courtesy of Antrc Industrial Corp.)

Antrc Industrial Corp. Aims for High-End Auto Parts Industry for Asian Markets

Dec 05, 2018

Antrc Industrial Corp. focuses on manufacturing plastic parts, metal parts and other automotive parts in the aftermarket industry. The firm can roll out parts and products that match with customers’ needs and the industry pulse in this changing and competitive market. Having deep roots in the AM industry, Antrc can deliver with its complete supply chain, from designing, molding making and finally...

ANTRC INDUSTRIAL CORP.


NHC and YangPo products satisfy demands for different automobiles. (photographed by Tseng Lung-nan)

Brake Maker Nan Hoang Rides on Biz Upswing to Offer More Clients the Best

Dec 04, 2018

For more than five decades, Nan Hoang Traffic Instrument Co., Ltd (NHC) has been one of the major manufacturers of specialty vehicle friction materials in Taiwan and around the world. Chairman Austin Cheng has been carrying out their “double-arrow developing plan” for this year. In one aspect, through its private label YangPo, NHC aims to adopt a more effective marketing strategy for selling own-...

NAN HOANG TRAFFIC INSTRUMENT CO., LTD.


Intime offers high-quality performance brake calipers. (photo courtesy of Intime)

Intime's Products Sought-after by Professionals Worldwide

Dec 04, 2018

Founded in 2013, Intime Auto Parts Co., Ltd., specializes in making performance brake calipers and performance shock absorber systems. Intime takes pride of its “n&b performance” series. The firm's n&b ceramic brake pads, which are made of low metallic NAO material, is capable of functioning without damaging the brake discs. Also notable is that the brake dust can be removed easily from the al...

INTIME AUTO PARTS CO., LTD.



Insiders' Views

Megvii Technology Founder and CEO Tang Wenbin

Part 1 Megvii Technology Founder Interview: Face++ AI Facial Recognition sets eye on Asia, starting with Taiwan

Sep 07, 2018

Using facial recognition to remove security checks and recognizing criminals sounds like technological applications out of a movie, though much of it is already implemented in everyday life. Having been founded for only seven years, Megvii Technology Limited, or more commonly known for its facial recognition and AI application Face++, owns critical technology by combining both, and now, recently ...

FOXCONN TECHNOLOGY


Megvii Technology Founder Interview Part 2: Face++ AI Facial Recognition sets eye on Asia, starting with Taiwan</h2>

Megvii Technology Founder Interview Part 2: Face++ AI Facial Recognition sets eye on Asia, starting with Taiwan

Sep 07, 2018

Tang Wenbin, founder and CEO of Megvii Technology, will be visiting Taiwan next week, but accepted an overseas interview with Economic Daily News on Sept. 6. This is the second installment of the interview. Aiming for a complete application; forming a city’s “brain” Q: What are the goals and strategy for the next phase? A: When the company first started off, we had to find a way to impl...

FOXCONN TECHNOLOGY


MPN's Editor-at-large Provides Holistic, In-depth Insights into U.S. Market for Powersports</h2><p class='subtitle'>Industry veteran suggests Taiwanese suppliers establish market presence as priority</p>

MPN's Editor-at-large Provides Holistic, In-depth Insights into U.S. Market for Powersports

Industry veteran suggests Taiwanese suppliers establish market presence as priority

May 24, 2018

One of the concurrent events held during the 13th Taiwan International Motorcycle Industry Show (Motorcycle Taiwan 2018), the seminar titled “Turning New U.S. Powersports Business Opportunities” was rounded off with overwhelming acclaim from the audience as a resounding success, mostly thanks to the excellent quality of the lecturers invited, all of whom are seasoned veterans and experts at high ...



Exhibition Highlights

Taiwan Firms Kicks off 2019 at ArabPlast </h2>

Taiwan Firms Kicks off 2019 at ArabPlast

Jan 10, 2019

The biannual ArabPlast 2019 is marked as the most indicative benchmark as the largest trade expo for plastics, petrochemicals and rubber industry in the MENA region. The show kicked off on Jan. 5, attracting 336 exhibitors from 27 countries. Taiwanese exhibitors also attended, led by Taiwan Association of Machinery Industry in a 34-member strong delegation, a size just shy of China and India. ...


2018 AAPEX Post-Show Report</h2>

2018 AAPEX Post-Show Report

Dec 24, 2018

The 2018 edition of Automotive Aftermarket Products Expo (AAPEX) kicked off from Oct. 30 to Nov. 1 at Sands Expo Center; a total of 6,269 exhibitors came from 43 countries/regions, a 4% growth compared to last year’s figures, using up over 5,000 booths. Organizers estimate that over 162,000 professional buyers from approximately 135 countries visited the largest show of its kind in the North Amer...


Source: show organizer

The 19th Fastener Trade Show Suzhou - China's leading one-stop purchasing platform for fasteners, machinery and supporting products

Dec 05, 2018

As a large international fastener specialized exhibition, the 19th Fastener Trade Show Suzhou will connect the upstream and downstream of fastener manufacturing industry. Focusing on end users and building a global fastener trade platform are the highlights of the show. The 17th Fastener Trade Show Suzhou, successfully held during 26-28 October 2017, was highly praised by exhibitors and visito...