On February 27th, 2018, China Steel Corporation (CSC) held domestic price meeting for the second quarter (April – June) shipments and released the following statement:
In January, IMF raised up its global forecast for 2018 to 3.9% and indicated the expansion will be continuous for next year. The bright outlook of recovery and loose monetary policy made the expansion of the euro area more than expected. U.S. economy remains strong and benefits from the spillover effect of U.S. tax reform as well as the rolling out infrastructure plan. Growth is expected to moderate gradually in China. Following the optimization of economic structure reform, the domestic demand and investment of infrastructure maintain the balance. Directorate General of Budget, Accounting and Statistics of Taiwan revised up the latest forecast of GDP to 2.42% in 2018, reflecting the stronger export demand and bright prospect in industrial production.
The world’s largest producer, ArcelorMittal, forecasted the growth in steel demand would be more than 1.5% in 2018. The supply of steel is tight due to annual revamping in Korea which cuts the production by 0.7 million tonnes and the winter production cuts in China. These events heat up the hot-rolled coil(HRC) prices and make the market fluctuating at the relatively high level. The HRC price in U.S. booted to US$825/MT in January, 2018. It means the mills have raised the price cumulatively by US$66~100 per tonne comparing with the price in December. Furthermore, the USA market for HRC has been unusually strong due to the influence of Section 232 to reduce the foreign steeling offerings.
Upside growth in Europe brings the demand of steel, and the HRB price has risen to more than US$710/MT. Japanese mill, NSSMC’s price quotes on hot-rolled steel to South- eastern Asia are steadily above US$620/MT, and expecting further price increasing for US$30~40/MT in the second quarter. Chinese mill’s price offers for the first quarter shipment were moderately high for Chinese Lunar New Year holidays. The price for second quarter already rose around US$20~30/MT. The steel price is expected to lift for the second quarter in light of the support of the world’s largest steelmaking country fulfilled its target of cutting back steel capacity by 35 million tonnes this year and the restocking of Chinese Lunar New Year.
Due to the coming of the traditional peak season and the demand from infrastructure project, domestic steel market in Taiwan tends to steadily go up.
The export demand continues to firm up since the following prospects of the economy in U.S. and the euro area. Considering the moderate price increase of CSC in the first quarter and the competitiveness of downstream consumers as well as the effects of appreciation of new Taiwan dollar, CSC plans to raise the steel product base prices for the second quarter by the average of NT$ 914/MT, and the ratio of price increase is equivalent to 4.2%.
|Prices adjustment for 2018 Q2 Domestic Sales:|
|Products||Average Adjusted Amounts (NTD/MT)|
|Bars and Rods||+1,000|