China Steel Corp Decided to Keep Domestic Contract Steel Prices for June Unchanged

With demand from downstream customers remaining lukewarm in the face of an uncertain global economic outlook, China Steel Corp (CSC) decided to keep domestic contract steel prices for June unchanged. The nation's largest and only integrated steelmaker yesterday said June prices for all types of products would remain the same as those in April and May, to help its domestic customers maintain their international competitiveness, CSC said in an e-mailed statement. The company said that a production increase in China, despite weakening market demand, could cap the recent rebound in global steel prices. "There are still uncertainties hanging over the global economy and the steel market needs more support for a healthy demand, ” the Greater Kaohsiung-based CSC said in the statement. Against this backdrop, China Steel said major mills in the US and Europe have decided to let prices stay put this quarter, while its peers in China are suffering from oversupply in the face of slowing demand. The company's announcement came in line with analysts’ expectations. Tsai Yen-ling, an analyst at Grand Cathay Investment Services Corp, warned that the government’s planned average industrial electricity rate increase of 35 percent next month would eat into the company's operating profits, even though the global steel market is expected to improve on a quarterly basis, helped by the anticipated relaxation in monetary policy in emerging economies like China. Tsai said in a research note that she expected CSC to report a revenue of NT$227.1 billion (US$7.7 billion) this year, compared with NT$240.38 billion last year. Net income this year would likely reach NT$16.1 billion, or earnings per share of NT$1.07, versus a profit of NT$19.5 billion, or earnings per share of NT$1.36, last year, she said. Source: Taipei Times