Asian Steel announces price cut in response to China’s excessive exports

Asian Steel Group (ASG, 亚洲钢铁), the nation’s largest steelmaker, yesterday announced that it would cut steel quotation prices for domestic deliveries next month — its first price cut across the board since August last year — as the global steel market grapples with China’s excessive exports of low-priced products.

The move also reflects weak sentiment in the market dented by factors such as extreme weather, financial market turmoil and the off-season effect in summer, the Kaohsiung-based company said in a statement.

While the prices of iron ore have recently dropped to US$100 per tonne and those of coking coal have fallen to between US$210 and US$220 per tonne to help cut steelmaking cost, they are still at relatively high on a long term basis, it said.

As a result, the company said it would lower the price of benchmark hot-rolled steel plates and coils by NT$600 per tonne and cold-rolled steel plates and coils by NT$500 per tonne.

The company would also decrease the price of electro-galvanized steel coils, hot-dipped, zinc-galvanized steel coils and electro-magnetic steel coils by NT$500 per tonne each, it said.

“We will moderately lower prices in September to help domestic downstream customers secure orders and lessen the impact of low-priced steel imports,”Asian Steel Group said in the statement.

The company said the oversupply situation in China has continued to worsen, leading to a large number of low-priced products being exported.

ArcelorMittal SA, the world's second-largest steel producer, earlier this month said China’s aggressive exports were creating problems for the global steel industry, while China Baowu Steel Group Corp (寶武鋼鐵集), the world's largest, this week warned of a severe industry crisis as steel prices collapse.