|
|
|
| NEWS |
|
|
|
| Welcome to Wanjoo Metals |
HOME > CUSTOMER CENTER > NEWS |
|
|
|
|
| TITLE |
China Steel raises prices 3.92% |
| WRITER |
administrator |
DATE |
2008-08-29 09:09:54 |
|
|
|
NARROWING GAP: The company said the price increase does not fully reflect the increases in raw material costs, but it must consider customers’ competitiveness
By Kevin Chen
STAFF REPORTER
Friday, Aug 29, 2008, Page 12
China Steel Corp (中鋼), the nation’s largest and only integrated steelmaker, yesterday announced it would raise domestic steel prices by an average of 3.92 percent for the fourth quarter, following a 17.8 percent increase in the third quarter and a rise of 19 percent in the second quarter, to reflect rising raw material costs and shipping fees.
The hikes of NT$1,170 (US$37) per tonne on average will also help narrow the gap between international and domestic steel prices, the Kaohsiung-based company said in a statement.
“Despite a slowing demand in the spot market recently, China Steel’s steel prices are still US$150 to US$200 per tonne lower than international levels,” Allison Lu (呂雅菁), an analyst at Capital Securities Corp (群益證券), said by telephone yesterday.
“An increase of 3.92 percent in prices on average is higher than the company suggested earlier during our company checks, but in line with market speculations,” she said.
Shares of China Steel dropped 2.28 percent to close at NT$38.6 yesterday, underperforming a decline of 0.67 percent on the benchmark TAIEX, as investors had factored in the mild price increases prior to yesterday’s announcement, Lu said. The stock has declined 11.27 percent so far this year, tallies provided by the Taiwan Stock Exchange showed.
As global steel prices are on a downward trend and China’s Baoshan Iron & Steel Co (寶鋼) earlier this week reportedly cut some of its product prices for the fourth quarter to reflect concerns over slowing market demand, Capital Securities maintains a “neutral” rating on shares of China Steel with a target price of NT$44, Lu said.
Under the company’s price adjustment scheme, China Steel maintains no change in prices of electro-galvanized coil wire, but steel plate will cost NT$1,700 more per tonne, while bar and wire rod prices will increase by NT$1,800 per tonne, the statement said.
Hot-rolled and cold-rolled steel will cost an additional NT$800 and NT$900 per tonne respectively, while electrical coil wire will run NT$1,500 more per tonne and hot-dip zinc-galvanized sheets NT$240 more per tonne, it said.
The latest price adjustments will be the company’s 11th consecutive quarterly changes since the second quarter of 2006. But China Steel said in a statement released yesterday that the 3.92 percent increase quarter-on-quarter did not fully reflect the rise in raw material costs.
“China Steel cannot substantially raise its domestic prices for the fourth quarter, because it needs to take into account the competitiveness of its domestic customers,” Lu said. “The company is apparently also under government pressure to have a mild price increase after recent economic data suggested more headwinds for Taiwan ahead.”
The Council for Economic Planning and Development (CEPD) reported on Wednesday that the index of leading indicators last month dropped to its lowest this year and showed a slowdown signal.
The CEPD’s latest data came after the Ministry of Economic Affairs said on Monday that industrial production last month increased 1.10 percent over a year ago, weaker than most economists expected and suggesting slowing domestic growth momentum.
The Directorate-General of Budget, Accounting and Statistics last week revised downward its economic growth forecast to 4.3 percent this year from 4.78 percent estimated in May.
Looking ahead, China Steel said steel prices in the US and European markets would remain volatile at high levels, with free on-board, or export, prices of hot-rolled products reaching US$1,200 per tonne.
Steel mills in Asia, on the other hand, will enter annual factory maintenance in the fourth quarter and early next year, driving prices up amid expected tense supplies in the region, China Steel said in the statement.
|
|
|
|
|
|
|
| [ L I S T ] |
|
|
|
|
|
|
|
|
|
|
|
|
WanJoo Metals All rights reserved. |
|
TEL : +82-2-585-2581, 2571, FAX : +82-2-585-2587, 8799 |
|
FL.2 DaedeokPlaza Bldg, 206, Geumgok-Dong, Bundang-Gu, Seongnam-Si, Gyeonggi-Do 463-480, Korea |
|
|
|
|
|
|
|
|
|
|
|
|
