China Steel Corporation (CSC) hereby announces the following statement, regarding the forecast and sales price adjustments for the second quarter of 2023 as well as April 2023 shipment.

Global economy is set to return to steady growth, as IMF revises up its global economic growth forecast for 2023 to a 2.9% growth from the former 2.7% forecast, as well as lifting forecast in Europe, the U.S., Japan, and China. China has removed all the COVID-19 restrictions and releases multiple stimulus measures after the Two Sessions, all these factors are expected to boost the demand. The growth in China is projected to increase from 3% for 2022 to 5.2% for 2023, driven by the rebound of private consumption amid the earlier-than-anticipated reopening of China, according to IMF’s forecast. Furthermore, its manufacturing Purchasing Managers' Index (PMI) has reached 52.6% in February. Taiwan's Manufacturing PMI in February rose to 51.4%, which showed its manufacturing activities returned to expansion mode, breaking a seven-month contraction streak. Furthermore, Taiwan government has allocated NT$600 billion (US$21.33 billion) for spending on public infrastructure this year amid the COVID-19 pandemic, hoping to provide an enhanced positive momentum to Taiwan economy.

Upon steel demand side, the Chinese government launched the newest infrastructure projects after the Two Sessions, the stimulus policies on real estates and car sales were showing results, driving inventory replenishment and effective release of rigid demand, while in Europe and American region, due to the tightening supply and the price hike of local steel manufacturer, incentive buying emerges. Global automotive makers forecast a surge in sales as supply chain bottlenecks are expected to ease this year, allowing the automaker to reduce delivery backlogs. LMC Automotive forecasts a 6% growth this year on global automotive sales to 85.8 million vehicles. Furthermore, the steel market has entered its traditional peak sales season, the second quarter of a year, and the steel industry is in optimistic expectations.

Looking at the supply side, China continues to deepen supply-side reforms. According to the statistic released by China Iron and Steel Association (CISA), China's crude steel output fell by 2.1% to 1.013 billion tons last year, a decrease of about 51.77 million tons from the peak of 1.065 billion tons in 2020. During the Two Sessions in March this year, China's major steel manufacturing cities such as Tangshan and Handan, implemented limited production under environmental protection policy deepen doubts about steel supply. Constrained by soaring energy costs in Europe and the United States last year, steel mills cut production and shutdown operations on a large scale. Currently, the progress of resumption of production still slow, coupled with the post-disaster reconstruction demand in Turkey, the global steel supply and demand are tightening.

As for raw material factors, the price of iron ore fluctuated at US$125-130 per ton, up 18% from the lowest point by the end of last year; moreover, China returned to the Australian coal trading market, the price of metallurgical coal also remained strong above US$350 per ton, a 46% hike from the lowest point last year. In addition, certain alloy costs have risen sharply, which has caused a strong rise in the input costs of steelmaking raw materials and alloys. Besides, the BDI index has soared by as much as 160% since mid-February this year, and the surge in freight has helped the commodity market to rise.

Major steel mills have risen prices spontaneously. Cleveland-Cliffs and Nucor in the United States have raised sheet prices for eight consecutive times since November last year, with a cumulative increase of more than US$617 per ton (US$560 per short ton), bringing the local hot-rolled market exceeded US$1,250 per ton; Since the end of last December, the price has increased by nearly US$180 per ton in Europe. Baowu steel group lifted its domestic hot-rolled coils price of April by RMB 200 per ton (around US$ 29), Angang and Benxi steel group increased sharply by more than RMB 300~400 (about US$ 43~58) per ton. Formosa Ha Tinh Steel Corp. also increased price for hot-roll steel by US$30 per ton. Global steel prices in the short-term are in bullish trend.

The world's major economies have bottomed out and rebounded, driving a new round of rigid demand in the steel market. It is expected that international steel prices will rise steadily. It is hoped that downstream customers should also actively grasp the trend of green steel and low-carbon emissions, ahead of Europe CBAM transitional phase in October this year, accelerate their own carbon footprint verification process, and prepare for advance deployment. CSC will also join hands with downstream customers to welcome niche of green development.

Considering the surging raw material costs, the risk of international currency fluctuation and the rise of import steel prices, and the consideration of offering competitiveness of the downstream customer, CSC takes mild and step-by-step price adjustment following the international steel price increase. The price for second quarter are appropriately adjusted according to the differences between the downstream industrial structure and the cumulative increase in the international market since the beginning of the year. In addition, , the prices of various alloys (nickel, molybdenum, vanadium, etc.) have been soaring since the beginning of Russia-Ukraine war last February. Considered the difficulties of customers during the downturn, CSC has been absorbing the increased costs in the past four seasons. This time, for materials with certain high alloy content, CSC will levy an additional moderate surcharge, in order to partially reflect the rising alloy costs.

CSC hereby announces the price adjustments of domestic steel sales for the second-quarter of 2023/April 2023 shipments are listed as follows：