China Steel increases domestic product prices

In a statement released Friday, the steelmaker said it has decided to hike its product prices for March contracts by an average of NT$612 (US$21.1) per metric ton.

The price hike follows a smaller 0.39-percent domestic wholesale price rise for January-February delivery imposed in December.

China Steel said the price hikes were justified because of rising global steel demand resulting from a rebound in the world's economic fundamentals, which has depleted inventories and lifted iron ore and steel product prices.

Demand for steel in China, one of the world's largest steel consumers, has grown with Beijing's renewed emphasis on infrastructure and urban modernization, leading major Chinese steel companies to raise quotes over the past few months.

Increased liquidity in global markets has also improved the world's economic climate, China Steel said. The European Central Bank has left key interest rates unchanged, indicating that the region's debt woes are stabilizing, and the United States Federal Reserve has stepped up liquidity easing measures, the company said.

At home, Taiwan is expected to benefit from the worldwide recovery. The government expects the local economy to grow at a 3.15-percent pace in 2013, up from an estimated 1.13 percent last year, China Steel said.

Under such favorable circumstances, the steel sector should see a gradual uptrend in product prices, the company said.

In the latest round of price hikes, prices of steel plates for car and home appliance use, steel bars, hot-rolled steel, and cold-rolled steel have been raised by NT$74, NT$818, NT$551, and NT$760, respectively, per metric ton, according to China Steel.

China Steel said it has also raised prices of electrical steel coils and hot-dipped zinc-galvanized steel by NT$241 and NT$600, respectively, per metric ton for March contracts.

The steelmaker has left electro-galvanized steel coils, and steel plates for ship building and building construction use unchanged, however. The company faces fierce price competition from Japanese, South Korean and Indian steel suppliers in the two product categories, the company said.

It said aggressive cuts in import prices had boosted the Taiwan market share of imports in the two product categories to 35 percent in the fourth quarter of 2012, up from 21 percent recorded in the first quarter.

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