China Steel to Increase Prices After Demand Climbs

China Steel Corp., Taiwan’s largest producer, will increase domestic prices for the first time in three months after demand climbed.

Prices will rise an average of 2.9 percent for March contracts, the Kaohsiung-based company said today in a statement. The mill announced in October increases in some prices charged to Taiwan customers for December.

Taiwan’s output of base metals advanced 29 percent in the 11 months to November because of demand from users including construction companies, automakers and shipbuilders, the Ministry of Economic Affairs said Dec. 23. Price increases will help the mill cover rising costs.

“Demand has improved,” said Michael Chung, a Taipei-based analyst at Capital Securities Corp., who has a “buy” rating on the stock. “Steel prices should be climbing in the first half.”

Prices of hot-rolled coil, a benchmark product, will increase by an average NT$973 （$33.5） a metric ton, the Taiwanese company said in the statement.

China Steel climbed 0.6 percent to close at NT$33.60 in Taipei trading before the announcement. The stock has risen 14 percent in the past six months, compared with an 18 percent gain in the benchmark Taiex index.

Plate Prices

The company will increase plate prices by an average NT$824 a ton and cold-rolled steel by NT$661, according to the statement. It will raise prices of hot-dipped zinc-galvanized sheets by NT$1,252. Prices of bar and wire rods, electro- galvanized sheets and electrical sheets will remain unchanged.

No percentage changes were given for the types of products in the statement.

Iron ore prices more than doubled in the past two years, according to the Steel Index, on a surge in demand from India and China. Raw materials account for 70 percent of the mill’s costs, Chairman Tsou Jo-chi said in November.