Report by Wang,Sheng-yi
In a meeting held today between the Screw Industry Association and China Steel Corporation (CSC), the main focus was on analyzing the global situation and discussing future prospects. During the meeting, a representative from the screw industry suggested that the declining international steel prices have benefited local screw manufacturers in Vietnam, despite being affected by the overall market conditions. The representative urged China Steel Corporation to consider lowering their prices to improve the competitiveness of Taiwanese screw manufacturers.
It is widely agreed upon in the market that a price reduction for Q3 wire rod is imminent, although the exact extent of the reduction is yet to be determined. Market expectations suggest a decrease of around NT$2,000 per metric ton. However, downstream manufacturers have compared China Steel Corporation’s prices to those of wire rod suppliers in Vietnam and China, revealing a noticeable price gap between China Steel Corporation and international prices.
Cai Tu-jin, Chairman of the Screw Industry Association, stated that the association and relevant members have already discussed how to adjust pricing with China Steel Corporation. Due to fair trade principles, the detailed pricing cannot be disclosed. However, with more than ten days remaining until China Steel Corporation’s pricing announcement, there is ample time for further discussions.
Furthermore, the rapidly changing international market over the past two years has indicated that infrequent pricing updates do not favor order placement in the downstream industry. The question of whether China Steel Corporation should switch to monthly pricing instead of quarterly pricing has been debated in the market recently.
In response, Cai Tu-jin expressed that monthly pricing allows for more immediate adjustments, but quarterly pricing also has its benefits. Particularly for the screw industry, which typically receives long-term orders with six-month or one-year delivery periods, a switch to monthly pricing might not be advantageous. Therefore, adopting a monthly pricing system may not be suitable for the Taiwanese screw industry.
Regarding future prospects, Li Jia-cheng, the Sales Manager of China Steel Corporation, pointed out that based on data, the main competitors for Taiwanese screws are in China. This year, screw exports to Europe and America from Taiwan decreased by 30%, and Vietnam’s overall export volume decreased by 13%, reflecting a similar situation for Taiwan, mainly due to the overall market conditions.
Li Jia-cheng stated that with the conclusion of the US interest rate hike policy, the purchasing power of foreign customers is expected to gradually recover. Additionally, as customer inventories gradually deplete, the conservative ordering trend observed in the first half of the year is expected to improve in the second half.
Coverpicture by Wang,Sheng-yi
