Alexa

China Steel sees signs of product prices bottoming out in Q4

China Steel sees signs of product prices bottoming out in Q4

Taipei, Oct. 27 (CNA) China Steel Corp., one of Taiwan's leading steel suppliers, said Saturday there are signs that steel product prices will soon bottom out in several major world markets because of an increase in demand in the fourth quarter. China Steel Chairman J.C. Tsou said orders for the company's steel plates in the fourth quarter have risen by 3 to 5 percent from a quarter earlier, when companies streamlined their inventories because of the sluggish global economy. Due to the recovery in orders, Tsou said, product prices in the United States, China and Japan have stabilized to some extent, and the hope is that prices will begin to rebound by the end of this quarter. In addition, China's government appears ready to further stimulate the mainland's slowing economy after a once-in-a-decade power transition is set in motion at the 18th National Congress of the Communist Party of China, which begins Nov. 8, Tsou said. Such a development would contribute positively to a recovery of the global economy and a rebound in the steel industry, Tsou said. In Europe, however, buying remains weak amid lingering debt problems in the eurozone, which has led to the temporary shutdown of some of the continent's steel furnaces, Tsou said. Tsou, who recently took the helm of the Taiwan Steel & Iron Industries Association, said he does not expect Europe's steel industry to make a turnaround until the end of the first quarter of next year. Earlier this month, China Steel announced it was cutting domestic wholesale steel product prices by 3.31 percent for December contracts from October and November contracts to boost buying. The wholesale price cut was the third made by China Steel in the second half of this year due to weakening global demand. Tsou said, however, that several major steel suppliers, including China Steel, have no plans to further cut product prices as the price reductions have substantially squeezed their bottom lines. Chen Yu-soong, chairman of Chung Hung Steel Corp., another Taiwanese steel producer, was less upbeat about China's market as he believed it will continue to see supply exceed demand. Chen said that while stimulus measures in China will lift steel product sales to some extent, the corresponding recovery in prices is expected to encourage more supply from market players, which would adversely affect the market climate. He said the global steel market has remained slow in the fourth quarter and is unlikely to make a quick comeback in the first quarter of next year. (By Wei Shu and Frances Huang)


Updated : 2021-04-16 01:11 GMT+08:00