China Steel Corporation has seen January and February 2012 orders increase, due to lower prices the firm has offered clients. These orders are enough to get CSC working even during the Chinese New Year holidays.
For January and February 2012, CSC lowered wholesale prices by an average TWD 1,756 a tonne, or a margin of 7.08%, to increase demands in the sluggish steel industry. Among the firm's major products, hot rolled steel saw price decline by TWD 1,800 a tonne, while cold rolled steel fell by TWD 1,900.
According to the firm, it has confirmed all January and February orders on December 1st 2011. Orders for hot rolled steel exceeded the firm's original estimates by 10%, after clients placed new orders to capitalize on the price reduction.
The firm also got full orders for steel plates. CSC was at first worried that orders for the product may be insufficient given the company only lowered steel plate prices by TWD 1,000 a tonne.
According to analysts, CSC has steel plate production capacity of about 75,000 to 80,000 tonnes every month, over half of which is to fulfill orders from CSBC Corporation, Taiwan's main shipbuilder. It is estimated most of CSC's steel plate orders for January to February 2012 came from CSBC and other steel manufacturers.
CSC also denied reports that it and China's Baosteel have joined forces to ask raw material suppliers to lower prices. The fact of the matter was that Baosteel had asked iron ore supplier Vale SA to base its contract prices on spot prices of the current quarter, a request that has gotten Vale's consent. CSC then asked Vale to receive the same treatment.
The firm said that Australia's two major suppliers, the Rio Tinto Group and BHP Billiton, have not agreed to this arrangement and CSC is still working to get their consent.
According to analysts, the new procurement system will cause raw material prices to be more volatile. If that happens, China Steel must know more about the demands of the downstream market to set prices more accurately, analysts said.
(Sourced from www.chinapost.com.tw)
