Announcement for Domestic Steel Prices for the First Quarter of 2023 / January 2023 Shipments

Date：2022/12/16

December 15th, 2022, China Steel Corporation (CSC) hereby announces the following statement, regarding forecast and sales price adjustment for the first-quarter of 2023 / January 2023 shipments.

As global inflation is showing signs of having peaked, market estimates the Fed may slow the pace of its interest rate increases, causing US dollar index to slump, stimulating capital flows to shift back to the financial markets and trade markets, and causing international offers of bulk commodities to rebound. After the G20 summit in 2022, Chinese government gradually loosened its COVID curbs and every country has also released various economic stimulus packages and infrastructure plans in order to help the economic and manufacturing industry to get back on track as soon as possible. OECD projects global GDP growth at 2.2% in 2023 and 2.7% in 2024, showing a good sign of global economic recovery.

In terms of steel demand, the Chinese government released its fiscal stimulus measures, such as the 16-point plan, to cheer up the demand of its construction industry recently. Global car sales volume is expected to increase by 6% YoY in 2023 by OICA, benefited from an easing in the global chip shortage. Worldsteel forecasted steel demand in 2023 will increase by another 1%, of which India and Southeast Asia will grow by 6.0% and 6.7% respectively. After China loosened the COVID-19 lockdown policies, worldwide steel demand in 2023 might increase further.

On the supply side, major steel mills in Europe, the US and Asia are reducing their production volume. According to Worldsteel, world crude steel production from January to October in 2022 decreased by 3.9%. South Korean truckers' strike has blocked the logistic of steel products, which is expected to tighten global steel supply further. Meanwhile, China's countrywide steel inventory level reduced by nearly 50% compared with the first half of 2022. Such shows the destocking of global steel market is coming to an end.

Regarding the raw materials, the price of iron ores is at above $110 per tonne CIF China, while that of coaking coals stays at above $250 FOB Australia, both should be supportive of the steel price. Inspired by RMB appreciation and loosened COVID-19 lockdown policies, Chinese HR export offer prices raised above $30 per tonne from recent low. Boawu, Ansteel and Benxi increased their domestic steel prices by around 50~300 RMB per tonne for shipments in January. Moreover, US mills, such as Nucor and Cleveland, both increased their sheet prices by around $66 per tonne in the end of November, and then Cleveland again declared to raise around $55 per tonne in the middle of December. European mills plans to raise $85 per tonne in the first quarter of 2023, so does FHS, whose W/R raised $25 per tonne and HR raised $55 per tonne. These signs show that the worldwide steel price is bottoming out.

Due to several negative factors, such as Russia-Ukraine war, European energy crisis, high inflation, raising rate and sever epidemic prevention measures in China, worldwide steel price is volatile in 2022. Supply and demand are moving toward balance next year. Furthermore, EU committee declared a review in early of December to determine whether to terminate the safeguard policy or not in the middle of next year, one year ahead of its original schedule. Furthermore, CBAM will begin to operate from October 2023 onwards. Initially, a simplified CBAM would apply essentially with reporting obligations only and the carbon tax will be levied in 2027. The trend of carbon neutrality will lead to an era of high steel prices, and we'd like to appeal to downstream steel users for taking preventive measures.

Considering major steel mills in Europe and the US raised their prices and the import offer prices went up, CSC hereby announces an increase of domestic steel prices for January shipments. As for the quarterly prices of the first quarter of 2023, in order to ease the mounting inventory pressure and to enhance the competitiveness of downstream industries, CSC decides to lower them reasonably. The price adjustments of domestic steel sales for the first-quarter of 2023/January 2023 shipments are listed as follows:

Price Adjustments of Domestic Steel Sales for The First-quarter of 2023/January 2023 Shipments

Offer Basis
Products
Average Adjusted Amounts (NTD/MT)
January shipments
HR Plate
+500
HR
+0~+500
CR
+500
EG
+0
GI
+0
ES
+0
Offer Basis
Products
Average Adjusted Amounts (NTD/MT)
First-quarter shipments
Plate
-500~-1,000
HR Plate
-1,000
Bar and wire rod
-1,500
HR
-1,000
CR
-1,000
Automotive usage
+500


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CSC - China Steel Corporation published this content on 16 December 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 December 2022 11:20:09 UTC.