China’s TISCO to stabilize steel output in H2 on oversupply
Shanxi Taigang Stainless Steel Co (TISCO), the listed arm of Taiyuan Iron & Steel Group Co, has no intention to increase its steel output much amid the persisting concern on domestic oversupply, according to TISCO’s interim report released on August 31.
In H1, TISCO produced 5.4 million tonnes of crude steel, which was up 5.2% on year as the domestic steel market had been upbeat in general, among which, stainless steel accounted for 2.1 million tonnes, or 4.3% more than a year ago, according to the report.
“We will very likely hit our annual steel production target this year because of the good performance in the first six months,” a TISCO official said with confidence. The company aims to produce 10.5 million tonnes of crude steel for 2018 including stainless, according to its disclosure in its 2017 annual report.
TISCO, however, has no inclination to exceed its 2018 production target despite the rosy profits in H1, as that “will pose threat to the healthy market in the latter half of this year if Chinese steel mills increases steel output further,” the company warned in the H1 report.
China’s domestic steel market will be under the persistent threat of oversupply amid the stable demand, and export environment is always with uncertainties with the influence of the US’ and EU’s anti-dumping and countervailing duties on China’s stainless exports, it added.
Moreover, TISCO has been losing its domestic stainless market share to East China and South China, the dominant stainless production bases in China, as more stainless producers joined in these two regions on the back of their low transportation costs, as TISCO is located in the inland Taiyuan City, North China’s Shanxi province.
Over January-June, TISCO exported 565,000 tonnes of stainless steel, up 5.5% on year, which was mainly because of its capability to provide the global market with all kinds of stainless products at all grades, it explained.
Its net profit, amid the robust markets in China and abroad, skyrocketed 283% on year to Yuan 2.8 billion ($411 million).
TISCO is boasting a 12 million tonnes/year steel capacity including 4.5 million t/y for stainless, producing 200-, 300-, and 400-series long and flat stainless products.
Written by Thea Feng, fengyx@mysteel.com
Edited by Hongmei Li, li.hongmei@mysteel.com
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