China Steel Getting Ready For Price Hike?

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Ferrous Metals

We love it when companies take contrary points of view. Why? Because they make life so much more interesting! This piece from the Taipei Times takes the cake from yesterday’s reading “China Steel Cuts Prices, Shifts to bimonthly Change.” So what you say? After having announced that it would make price announcements on a bimonthly basis, instead of a quarterly basis, China Steel Corp, “…attributed its decision to an expected rise in demand for steel products thanks to various economic stimulus packages worldwide, while major steel factories have been implementing large-scale output cuts in a bid to tighten supplies.” Two other bits of news relevant to the story – that China Steel Corp would lower its domestic steel prices by an average of 14.03 percent to bring it closer in line with domestic price levels and would put one of its furnaces on early maintenance to lower output in a bid to bring supply and demand back into balance. China Steel Corp is Taiwan’s largest steel producer.

Talk about moving the cart before the horse. China Steel wants to be sure it captures price increases as quickly as possible when the market goes back up, due to stimulus spending. But mainland China is already in over-supply and the US economic stimulus package still contains a Buy American clause which will shut out at least a big chunk of Chinese made steel (we believe Taiwan is considered “out”) Speaking of contrarian, here is an article on the Buy American clause which I couldn’t help but respond to over on Supply Chain Matters.

Do you have a contrarian point of view? Drop us a line. We’ll cover it!

–Lisa Reisman

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