good steel price outlook , page-2

Taipei, Jan. 4 (CNA) China Steel Corp., one of Taiwan's leading steel makers, said Saturday that its production capacity for February is fully booked due to solid demand from its clients in the downstream steel industry.

Judging from the backlog of orders, China Steel said its shipments for February are expected to remain steady compared with a shipment of approximately 1.02 million metric tons for January.

However, due to the fewer number of working days in January as a result of the upcoming Lunar New Year holiday, shipments for the month will fall slightly from the 1.04 million metric tons recorded in December.

The December shipments were calculated based on a combination of China Steel's 750,000 metric tons and its unit Dragon Steel Corp.'s 286,000 metric tons.

Although the Lunar New Year holiday, which falls on Jan. 30 and will continue until Feb. 4 this year, will cut the number of working days short in February as well, the fully booked capacity will ensure that shipments for February will offset the impact from the fewer working days and remain stable, the steel maker said.

Due to the solid orders from downstream clients, China Steel said it expects its monthly production to range between 750,000 metric tons and 790,000 metric tons, while Dragon Steel could roll out more than 200,000 metric tons of steel products in February.

Analysts from President Securities said demand in China, which is one of the major steel product consumers in the world, is on the way to a recovery after recent inventory adjustments, so the outlook for the global steel market has improved.

In December, Baoshan Iron & Steel Co. (Baosteel), the largest steel maker in China, decided to raise the prices of its major products, including hot-rolled steel, for January contracts by 50 Chinese yuan (US$8.20) per metric ton on average, after it left prices unchanged in the October through December period.

Market analysts said that led by Baosteel, China Steel will likely raise its domestic wholesale prices for March delivery from January-February contracts which saw prices drop 0.75 percent on average from December.

Before China Steel's decision on the wholesale prices for March contracts, rivals Chung Hung Steel Corp. and Yieh United Steel Corp. raised product prices for domestic sales and exports for January.

Analysts said that as steel product prices are expected to rise further, downstream clients will likely rush to place orders and build up inventory, a move which will boost China Steel's shipments for the first quarter of this year.