China Steel Corp (CSC) on Friday announced that it will cut base steel prices for domestic supply in the third quarter to reflect growing uncertainty that has led to a wait-and-see approach in the global steel market.
CSC will cut the price of hot-rolled sheets and coils by more than $ 32 per tonne, and cold-rolled sheets and coils, which are used in the automotive industry, by $ 30 per tonne, the company said. Prices for galvanized sheets will also be reduced by $ 26 per ton.
In order to support the export competitiveness of domestic consumers of CSC products, they also decided to reduce the price of steel rods and rods by $ 34.
"The unresolved trade conflict between the United States and China has increased international political and economic uncertainty, affecting the pace of global economic growth this year," the CSC said in a statement. “Global uncertainties have triggered short-term turmoil in the international steel market and end users have reduced their stocks in response.
As the cost of raw materials such as coking coal and iron ore remains high, major international steel mills have adjusted their strategies to avoid losses, and China Baowu Steel Group and Shougang Group Corp have kept their product prices unchanged.
According to CSC managers, in the short term, global steel prices have nowhere to fall, as raw material prices will not allow steel to be smelted at a lower price.
“In the future, if trade negotiations between the US and China turn positive and the market's expectation disappears, demand will again drive up global steel prices,” the CSC said.
A trend towards unfavorable global steel prices and weaker demand could further reduce the company's gross margin due to higher raw material costs.
