Global Fastener News

Taiwan’s CSC Lowers Steel Price by 22.5%

John Wolz

Taiwan steel supplier China Steel Corp. is reducing the price of steel products for Q1 by 22.5% to “enhance the international competitiveness of downstream industry.”

Fastener World magazine reported Taiwanese fastener manufacturers responded that the price reduction was “not satisfying but acceptable.”

Reporter Eric Liu noted the global economic situation, including the dropping price of petroleum, has led to “a chaotic quote mechanism for global steel prices.”

The price in Taiwan for hot rolled price remains US$730 to 800/ton, while the domestic price in Japan reaches US$950/ton. Hot rolled products by Baosteel in China declined to US$710/ton by the end of 2008, which is close to the production costs of international plants around US$670.

According to the World Steel Association, global output of crude steel was only 100 million metric tons in October 2008 down 12.4% versus the same period of 2007 following a 6.9% September decrease.

The Commonwealth of Independent States (SNG) cut production 32.6%, North America 12.9%, Asia 11.6% and Africa 13.6%. China cut production of crude steel 6.9% in September and 17% in October.

“In the environment of global economic slump, everyone should come up with ideas to lower wire materials and finished products in the stocks under 20%, which could reduce the stock cost as much as possible,” T.J. Csi, vice chair of the Taiwan Industrial Fasteners Institute, said. “In the meantime, we should cooperate with technical cut-down policy of CSC, keep the distributed quota of wire rods, reserve energies and pay more attention to international circumstances. Go overseas if possible, try your best to sell stocks and be active.”

CSC sales division director M.H. Chen said price cuts “reduces price in pain” even though the decrease in wire rod price “cannot meet the general demands of fastener industry, it is still a painstaking policy for CSC.” The Taiwan steelmaker is facing its first loss in 29 years.

Chen encouraged fastener manufacturers to shift to high quality, precision and value added value products.

Liu reported that manufacturers calculate if Taiwan and competitor China are within 15% on wholesale prices then Taiwanese producers can remain competitive. “Or else, facing the menacing low-price policy of Chinese fastener, Taiwanese manufacturers can only hope that EU adopts high anti-dumping taxes on China to stimulate the buyers from Europe and the U.S. to purchase high quality products in Taiwan that can help Taiwanese fastener industry recover from drastically withering recession in 2008,” Liu wrote. �2009 FastenerNews.com and Fastener World