China Steel to Expand High Valued Steel Sales by 10% in 2006

China Steel Corporation of Taiwan expects the steel sales will decrease by 14.7% to 155.5 billion New Taiwan Dollar with lower pretax profit for 2006 from 2005 with NT$ 65.1 billion of pretax profit. The firm expects the averaged selling price will decrease despite of the price hike effort since April-June while the steel sales increases by around 200,000 tonnes to more than 10 million tonnes in 2006. The profit decreases under higher raw materials cost including iron ore. The firm tries to increase the high valued products sales by 10% to 1.65 million tonnes through the effort to shift to higher valued products. The firm will increase the galvannealed sheet output by 100,000 tonnes to 250,000 tonnes after the commissioning of no.2 continuous galvanizing line with 300,000 tonnes of annual output capacity in March 2007.The firm posted record pretax profit with higher sales at NT$ 182.2 billion for steel business in 2005. The higher profit was due to the higher averaged selling price at NT$ 18,000 per tonne, which increased by around NT$ 2,000 from 2004, while the finished steel production decreased by 4% to 9.7 million tonnes and the sales decreased to 9.8 million tonnes. However, the selling price started to decrease since second half of 2005. The firm expects the lower price impacts on the profit for first half of 2006. The firm sees the averaged price in 2006 will be lower than 2005. The firm expects the steel sales will increase by 200,000 tonnes to more than 10 million tonnes in 2006 from 2005, when the relining of no.2 blast furnace reduced the output. The firm tries to increase the sales of high valued products including galvannealed sheet, electrical steel, high tensile steel and high-valued wire rod. The firm tries to expand the joint development program with the customers while the firm develops and launches new tool steel products. The firm also expands the sales of high valued bolt and nut for automobile while the firm expands the electrical steel sales mainly for motor.