Chien Shing suspends operation on downturn in stainless steel market

The company did not give an exact date when operation would resume, reported Central News Agency yesterday. Employees at the firm's manufacturing facility are now on unpaid leave, but those at Chien Shing's sales and customer support departments are still working, CNA quoted high-level Chien Shing officials as saying.

The firm had in the past shipped out 8,000 to 9,000 tons per month. Yet in the second quarter, shipments went below 2,000 tons.

Based on the company's current inventory level of 4,000 tons, operation could still last two months, CNA reported.

The firm's suspension of operation caused its stock to decline all the way to its 7 percent daily limit of NT$5.8, and it stayed there throughout the trade. Other steel shares also lost ground. The weighted index TAIEX rose 0.81 percent to 7,712.03.

The company's operation took a hit last year after the August 8 floods caused by Typhoon Morakot. Its cold-rolled steel manufacturing equipment were all flooded.

During the repair process, oil leaking out from the equipment contaminated nearby farms, spurring demonstrations from local farmers.

Chien Shing suffered another blow in the second quarter when the price of nickel fell. China's measures to curb rising property prices further sent the company's operation on a tailspin.

Stainless steel manufacturers admitted things were pretty harsh right now in the market, yet said they have contingency plans to respond to the recession in the industry.

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