OREANDA-NEWS. June 10, 2013. China Steel Corporation (CSC) held the domestic pricing meeting for 2013 July-August shipments and announced the following statement:

As global economy moves at slow pace, Global Insight revised 2013 global economic growth rate down to 2.5%. Since European unemployment is getting worse and business confidence still doesn’t improve, Europe economy remains stagnant. Meanwhile, U.S. House decides to raise tax and cut spending and FED might end quantitative easing, which both may cast negative influence on economy. Besides, due to overcapacity and cool-down measures in housing market, China’s first quarter economic growth was lower than expected. Due to weak global demand, Taiwan’s domestic demand and export order both show sign of downturn and DGBAS revised 2013 GDP growth rate down to 2.4%.

As global economy is losing steam in second quarter, steel demand is less than expected in this peak season. Since market confidence still remains weak, customers tend to reduce inventory. Meanwhile, oversupply of Chinese mills leads to stiff competition in Asian market. International steel prices fall further on thin transactions. As summer vacation, rainy season and Ramadan are coming, it seems demand will continue to remain soft in the third quarter. However, given that mills start to reduce more production in slack season and steel prices are only slightly higher than mills’ production cost, steel price is reaching bottom.

Demand of domestic downstream industry remains subdued as facing low price competition from Chinese mills and unstable global economy. Customers take a wait-and-see attitude and hesitant to place orders. To maintain the competitiveness of customers, CSC has decided to decrease steel prices overall by an average of 4.66%, or NTD1,008/MT for July-August sales.