Peaked Taiwan’s Steel Demand

Steel industry of Taiwan experienced major change in 2005 when many firms reduced the profit under the price decrease in the second half. The industry could face severe future when domestic steel demand has limited potential growth under hollowing out of domestic industry. Japan Metal Bulletin reports Taiwan’s steel industry. Taiwan’s investment for China increased to near US$ 7 billion in 2004 from near US$ 4 billion in 2002 and US$ 4.5 billion though the investment decreased by more than 10% in 2005. Taiwan’s offshore investment is shifting to Vietnam and domestic industry keeps hollowing out. The apparent steel consumption decreased by 9% to around 24 million tonnes in 2005 due to overstocking from 26.3 million tonnes in 2004. The demand is expected to increase by 3% to 24.79 million tonnes in 2006. However, the demand is 24-25 million tonnes since late 1990. The steel consumption is just more than 1 tonne per capita. The demand is likely not to increase as Japan. Some expect the demand could decrease by 5-10% in mid term with hollowing out and lower building demand. Taiwan’s raw steel output decreased by 9% to 19.56 million tonnes in 2005 when China Steel Corporation relined no.2 blast furnace and makers reduced the output with overstock and slump in the export market. The country cannot meet the domestic steel demand by the own supply. The country imports semi-finished steel products to meet the demand. The steel import was 19.94 million tonnes including near 8 million tonnes of semi-finished steels in 2005.