June 20^th, 2022, China Steel Corporation (CSC) hereby announces following statement, regarding forecast and sales price adjustment for third-quarter/July shipment of 2022.

Global economy has been affected seriously by Russia-Ukraine war. Currently, the scale of the war hasn't expanded. Europe and the United States have successively imposed economic sanctions on Russia. The European Union announced that it will cut oil imports from Russia by 90% by the end of the year. As global energy prices soar, increasing pressure of inflation is inevitable. In the beginning of second quarter, China tightened lockdown measures due to the epidemic, causing turbulence to the global economy and the commodity market. As the lockdown ended on June 1st, Chinese government releases 33 stimulus measures to boost the housing market, the auto market and the home appliance industry. International Monetary Fund (IMF) lowered the global economic growth rate expectation this year to 3.6%. Also, the General Accounting Office of the Executive Yuan revised down Taiwan's economic growth rate this year to 3.91%.

Global inflation is soaring high. The US Federal Reserve (Fed) and the European Central Bank (ECB) start to increase interest rate and shrink the balance sheet. It is expected that the higher interest rate will increase financing costs of enterprises and suppress the capital turnover of the manufacturing industry. It could drag down the pace of economic and demand growth. In order to stabilize the supply of domestic bulk materials, India imposed export tariffs on steel, coal and iron and other steel-making raw materials on May 22nd. Among them, the export tariff of carbon steel products have been significantly increased from 0% to 15%. Higher tariff would suppress steel export. With lower supply, international steel prices could recover from the downtrend.

Looking back at the beginning of second quarter, the international steel supply shortage popped up immediately after the outbreak of the Russian-Ukrainian war, and the downstream steel industry panicked to restock in March and April, driving steel prices up. However, since May, the impact of the war on the market has gradually faded, the European and American steel markets have cooled down rapidly, and the Asian steel market has been affected by the sharp drop of Chinese export quotation, which led steel prices to a downtrend. However, major Chinese steel mills, Baowu and Anshan Steel, have recently announced to roll over June prices to July, signaling the bottoming-out and recovery of steel market.

CSC considers current global situation is affected by uncertainties such as severe inflation, COVID-19 epidemics, the unsolved war between Russia and Ukraine and supply chain bottlenecks. In the past two months, rapid revision of international hot rolled and cold rolled prices and disruption of low-priced imports from China, South Korea, India, and Russia also cause turbulence to domestic market. CSC's customers are facing difficulties in sourcing materials and exporting finished products. In response to those unfavourable situations, CSC decides to decrease July shipment price by NTD 600-1,500 per ton, hoping to accelerate the bottoming of steel prices this year, and help downstream customers to reduce costs and strengthen export competitiveness. In addition, CSC is cooperating with Taiwan Steel & Iron Industries Association to monitor imported steel with abnormal quotations, and will file anti-dumping investigation if necessary. As for third quarter prospect, steel-consuming industries such as steel structures, fasteners, automobiles and motorcycles, home appliances, barrels are realatively stable. In order to enhance the competitiveness of downstream industries, CSC dicided to roll over third-quarter shipment prices and moderately lower the prices for July shipment by 2.32%(in average with third-quarter shipment prices). Prices adjustment shown as below table.

Prices adjustment of domestic sales for third-quarter/July shipment of 2022.