China Steel Corp (中鋼), the nation’s largest steelmaker, yesterday said it is cutting its steel prices by about 1.62 percent for domestic deliveries next month in response to lower demand due to accumulated inventory, global port congestion and the appreciation of the New Taiwan dollar.

The adjustments mean that prices of hot-rolled sheets, hot-rolled coils and electro-galvanized coils would fall by NT$500 per tonne next month, while prices of cold-rolled coils would fall by NT$700 per tonne, the largest cut among all products, China Steel said.

The price of hot-dipped zinc-galvanized coils used for construction and home appliances would decrease by NT$500 per tonne, the company said.

The reductions follow an average downward adjustment of 2.15 percent for deliveries this month, which the company announced on Dec. 22, corporate data showed.

Weaker demand has affected steel exports and reduced its number of customers, prompting the price cuts, the company said in a statement.

“Global supply chain blockages have increased due to ongoing gridlock at ports worldwide, and inventory levels remains high,” the statement said. “Meanwhile, exports would not benefit from a strong NT dollar, which has appreciated to a 25-year high against the US dollar.”

The spread of the Omicron variant of SARS-CoV-2 also dampened demand, the Kaohsiung-based company said.

Its price-adjustment strategy is “appropriate and follows the trend,” the steelmaker said.

Despite cutting prices for the domestic market, China Steel holds an upbeat outlook for the global market, as demand from suppliers of petroleum steel pipe is likely to increase on the back of rising prices of crude oil and a growing number of oil fields, the company said.

However, global steel supply might fall as China continues to lower its steel output to meet its target of carbon neutrality, it said, adding that South Korea is also reducing its steel manufacturing to curb carbon emissions.

South Korea’s Pohang Iron and Steel Co last month terminated a furnace with a capacity of 1 million tonnes per year, China Steel said.

“Based on developments in global supply and demand, we think that, although steel prices are in a correction cycle after dropping from a peak last quarter, they will rebound after the Lunar New Year,” it said.

Luxembourg-based ArcelorMittal SA is to raise prices of some steel materials by 30 to 50 euros per tonne, China Steel said.

Steel prices have also increased in northern and southern Europe, it said.

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