China Steel Corp. said Wednesday it will cut domestic product prices for the first time in six months, citing falling raw material costs and sluggish regional demand, the Wall Street Journal reported.
Taiwan’s largest steel producer by revenue is lowering prices for July and August by an average 1.64% compared with June. The last time it lowered prices was for the January-February period.
The company said that demand is likely to remain lackluster in the third quarter and lowering prices would help boost its downstream clients’ confidence and competitiveness.
The company kept its local prices unchanged for June, citing an insignificant improvement in demand and uncertainties in the international economic recovery.
The firm’s pricing decision for June to August was in line with analysts’ expectations.
Analysts said China Steel likely took its cue from Baoshan Iron & Steel Co., China’s largest listed steelmaker, which lowered its prices of steel products earlier this month for June bookings. Baosteel’s price cut may reflect weaker demand from China’s automobile and home appliances sectors, they said.
Chinese steel prices were flat for the day. The price of iron ore 58% fines from India hit a high price of CNY 840.00 ($134.67) and a low price of CNY 830.00 ($133.07) per dry metric ton. The price of Chinese HRC remained steady at CNY 3,350 ($537.09) per metric ton. The price of Chinese coking coal was unchanged at CNY 1,390 ($222.85) per metric ton.
For the fifth consecutive day, the cash price of steel billet held flat on the LME at $390.00 per metric ton. The steel billet 3-month price saw little movement on the LME at $400.00 per metric ton.
The US HRC futures contract 3-month price showed little movement on Tuesday, hovering around $625.00 per short ton. The US HRC futures contract spot price held steady at $685.00 per short ton.