Following three consecutive price cuts in the second half of this year, China Steel Corp (CSC) has decided to raise its contract prices for January and February deliveries after global steel prices rebounded from their recent low levels.

China Steel, yesterday said it would increase its January and February contract prices by an average of NT$82 (US$2.81) per tonne, or 0.39 percent, as it sees green shoots of global economic recovery for next year.

On Nov. 7, CSC chairman Tsou Juo-chi  said he expected the global steel industry to hit bottom in this quarter and expected the company’s shipments to increase by 3 to 5 percent this quarter from last quarter, local cable TV network UBN quoted him as saying.

The latest price adjustment is China Steel’s first price hike in about eight months. For the whole of this year, the company has cut domestic prices by an average of 12.31 percent.

The price increase was in line with the prediction by Fubon Securities Investment Services Co  analyst Lee Han-shin, who said ahead of the company’s price adjustment announcement that China Steel was likely to follow in the footsteps of China’s Baosteel Group Corp  to raise prices.

On Nov. 13, Baosteel announced that it would increase major steel product prices by an average of 100 yuan per tonne for next month’s contract, after it had lowered prices for more than five months, which Lee said indicates the market is bottoming out, according to a note to his clients released on Monday.

The Siaogang District, Greater Kaohsiung-based China Steel said in a statement that global steel prices have shown clear signs of bottoming out, given recent rises in global scrap steel prices and the recovery in iron ore prices.

"Both the US and European producers have seen their steel product prices stabilize on the back of low utilization rates, low inventory levels and recovering raw material costs, while major steel mills in China have raised their prices in expectation that the government’s infrastructure projects will boost steel demand,” the company said in the statement.

However, Lee said in his note that global steel prices would only show a gradual increase in the first quarter of next year because of the slow recovery of the global economy, adding that China Steel was not likely to see its profitability improve in the short term.

Following the latest price adjustments, the price of benchmark hot-rolled sheets and coils will increase by NT$281 per tonne, while that of cold-rolled sheets and coils, which are used typically in the automotive industry, will be NT$56 per tonne higher.

China Steel decided to maintain its price of steel bars and rods, as well as those for electro-galvanized sheets and electrical sheets, the statement said.

However, the company would cut the price of steel plates used in construction by an average of NT$271 per tonne and lower the price of hot-dipped, zinc-galvanized sheets by NT$175 per tonne, in a bid to boost sentiment and help maintain its customers’ global competitiveness, it added.

Separately, China Steel said it was planning to file an anti-dumping complaint over cheap steel plate imports from some countries including Japan and India.

"China Steel is considering lodging an anti-dumping complaint against those cheap imports to protect the interests of Taiwanese steelmakers and maintain order in the domestic market,” the company said in the statement.

Source: Taipei Times