Within total sales in May, 67% were consumed by local buyers, the same level as during April, according to the company’s latest monthly report released on June 22.
“The impact of the pandemic worldwide has not yet been eased significantly, and demand from our downstream customers (in Taiwan) and overseas buyers remains lacklustre overall,” CSC’s official told Mysteel Global, “even though many countries and regions have started to lift their lockdown measures since last month to help kickstart their national economies.”
Consequently, the integrated steelmaker is still labouring under financial losses. With the lower sales in May, CSC recorded a larger pre-tax loss of TWD 535 million ($18 million), slightly larger than that for April of TWD 493 million. Over January-May, the company’s total loss came in at TWD 3.6 billion, according to CSC’s release.
Last month’s low sales also took the company’s total carbon steel sales over the first five months of this year to 4.3 million tonnes, marking a slight decline of 11,031 tonnes or 0.3% from the same period of last year, CSC’s data showed.
Despite the dismal performance in May, the company is still confident of a market improvement in the second half of this year. The steelmaker announced last Thursday that it had decided to raise list prices of those major steel products it prices monthly by another TWD 900-1,200/tonne for sales in August. The average rise of 3.7% aims to offset the rise in production costs and to benefit from the gradually recovering demand globally, as Mysteel Global reported.
However, any substantial improvement in demand is expected to be a long time coming, local sources told Mysteel Global, and it’s hard to see CSC’s losses reversing in the near term given the increasing production cost burden it is carrying from high iron ore prices, they said.