Taipei, July 21 (CNA) China Steel Corp., one of Taiwan's leading steel makers, has lowered its domestic wholesale prices for September contracts in reflection of weakening demand due to the faltering world economy.
China Steel announced Friday after an internal price-setting meeting that its wholesale prices will be lowered by 5.01 percent on average or NT$1,139 (US$37.97) per metric ton, compared with the prices set for July and August contracts.
For the September contracts, the price of steel plates has been reduced by NT$1,410 per metric ton, a markdown of NT$1,300 for steel bar and wire-rod products, a cut of NT$1,200 for hot-dipped zinc galvanized steel coils and a reduction of NT$1,000 for electro-galvanized steel coils.
In addition, the wholesale prices of China Steel's hot-rolled steel products, cold-rolled steel products and electrical steel coils for September have been cut by NT$992, NT$949 and NT$929 per metric ton, respectively.
China Steel said the global economy has been hit by the lingering debt problems in the eurozone with major economies like the United States and China being affected.
Earlier this week, the International Monetary Fund lowered its forecast of the world's economic growth for 2013 to 3.9 percent from an earlier estimate of 4.1 percent, while leaving a forecast of 3.5 percent growth for 2012 unchanged.
At home, Academia Sinica, the top research institution in Taiwan, has lowered its forecast for Taiwan's gross domestic product growth for 2012 to 1.94 percent from an earlier estimate of 3.81 percent after the island suffered a decline in exports.
Amid economic concerns, China Steel said that steel markets at home and abroad have been suffering a supply glut, which has imposed an impact on demand and prompted buyers to lower their inventories. As a result, steel makers in the world have cut their product prices constantly since the beginning of the second quarter, China Steel said.
China Steel said the global steel market is also feeling the pinch of the slow-season effect now, but expects the situation will improve in the fourth quarter as steel buyers start to build up their inventories.
China Steel added as the major central banks in the world have come up with stimulus measures and are expected to further ease liquidity to boost the economy, global demand is expected to recover accordingly.
The steel maker cited a forecast by the World Steel Dynamics, a global steel market information advisory firm, as saying international steel prices are expected to rise in the fourth quarter.
(By Wei Shu and Frances Huang)