China Steel raw material costs slide amid stable revenue

China Steel Corporation (CSC) is forecasted to drop an average of 2.15% in new market prices next year. Due to the decline in the previous wave of price fluctuation on the coal and iron ore market, low-grade raw material costs have begun to roll into the production line. As a result, CSC has yet to see its profits impacted by the steel price cuts.

CSC closed at NTD$35.8 yesterday, down 0.05 yuan. Legal persons have told local media Economic Daily News that CSC's cost and selling price were revised downwards at the same time, with little impact on gross profit. As relevant companies maintain a certain level of delivery to CSC, the mid-and downstream domestic and foreign sales orders can maintain a balanced standard, conducive to the overall stability of the steel industry's production and sales.

CSC Executive Vice President Huang Chien-chi pointed out that the Executive Yuan Directorate General of Budget, Accounting and Statistics had once again raised the economic growth rate forecast for this year to 6.09%, a record high in 11 years. Taiwan's manufacturing and export momentum continued to increase, with exports of US$41.58 billion in November marking a record high. Huang emphasized that strong domestic investment in private and public projects due to the central government's "Three Major Plans for Investment in Taiwan," has allowed investments to exceed the NTD$1.5 trillion target.

In addition, the return of Taiwanese businesses from abroad to invest and expand factories has also led to the growth of domestic construction demand. Private investment and consumption confidence both point to better domestic demand. For example, Kaohsiung Asia New Bay Area will see investments of more than NTD$75 billion, while semiconductor-related industries have also announced the expansion of factories in Kaohsiung; Taiwan's downstream steel industry will be promoted by large-scale infrastructure construction at home and abroad, which will bring about a huge increase in steel demand.

CSC expects that the steel market will continue to grow steadily in the future, coupled with the recent European Union initiative to impose high anti-dumping duties on screws and fasteners in China, which will bring transfer orders to Taiwanese companies.