Taiwan's CSC takes measures to curb speculation
China Steel Corp (CSC), Taiwan's top integrated steel producer headquartered in Kaohsiung, South Taiwan, announced last Friday that it is taking measures to curb speculation and maintain the stability in Taiwan's steel market, according to a CSC release on June 4.
To ease the tight supplies of finished steel in the local market, CSC will prioritize providing steel for local end-users including tool and machinery manufacturers to the extent that its existing supply capacity allows, it said. CSC will also temporarily suspend the export of some steel products to benefit all downstream steel-consuming industries in Taiwan and maintain the prosperity of local economic development, the steelmaker declared.
The company said it has also asked Taiwan Association of Machinery Industry and Taiwan Machine Tool & Accessory Builders' Association to help members to investigate their steel-supply channels, price hikes and deliveries. At the same time, CSC will also take the initiative to check whether any suppliers of its products are adopting "speculative behavior" such as gauging or hoarding to drive prices up.
"We will reduce or suspend supplies (to any agents) if speculation is confirmed, and might even cancel our contract agreements with them," CSC disclosed.
An official from Chung Hung Steel, a CSC subsidiary also based in Kaohsiung, said the speculative activity creating problems for end-users currently is mainly heavy plates used in tool and machinery manufacturing while Chung Hung's main business is hot-rolled coil. "We have not found evidence of price gauging in sales (of hot coil), as the supply is really tight in Taiwan for the time being. In fact, we can't provide enough products for them (agents) to stock up," she told Mysteel Global.
In fact, for many months CSC has been trying to provide more support to customers by securing steel supply and stabilizing prices in response to the tight availability in the global steel market.
For example, the company's No. 2 blast furnace has been operating at full capacity since the end of last year after completing a revamp, as reported. Since the start of this year, CSC has also been striving to sell more in the domestic market to prioritize fulfilling domestic needs.
Moreover, CSC has been gradually raising its list prices and quarterly prices step by step since July 2020 to support downstream users, despite the sharp growth in overseas steel prices.
The integrated steel mill in Taiwan acted fast following discussions held on June 2 between the government and related associations including Taiwan Iron & Steel Industries Association, Taiwan Association of Machinery Industry and Taiwan Machine Tool & Accessory Builders' Association regarding price manipulation. On June 3, CSC called on other steel mills to work with it to maintain stability in steel supplies and prices, and to help curb speculation, as Mysteel Global reported.
Written by Nancy Zheng, firstname.lastname@example.org
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.