Low profitability and weak demand for Taiwanese stainless steel made local producers use more imported materials, which are more effective in terms of costs.
Taiwan exported almost 68 kt of STS products in September, down 12% over the month. However, imports hiked by 9% m-o-m to 108 kt. Thus, Taiwanese net imports of STS jumped by more than 80% from August (or by around 18 kt).
The trend is mainly attributed to high electricity costs and expensive STS scrap in Taiwan. Combined with weak export business and sluggish domestic consumption, it made mills lower their production cost by importing Indonesian slabs and HR sheets that were offered at the lowest prices in the region. The import volume of Indonesian slabs surged by 48% to 21 kt in September over the month, while HR sheet inflow added 5% to around 57 kt.
The second largest foreign STS supplier for Taiwanese buyers is China, but supplies slightly dropped from there. The total STS imports from China amounted to 18.5 kt, down 7% over the month.
The net imports are likely to grow further in the upcoming month or at least to stay high, market insiders believe. “Flats makers will try to lower dependence from Indonesian feedstock, as it is a big issue for export to the EU, but mills will continue using cheap HR sheets for CR exports to all other destinations,” a trading source in the country told SMR. “Local end-users will mostly have to consume STS products made from Indonesian materials. There are no other options at the moment,” another insider commented on the situation.
Post time: Nov-21-2023
