TPT May 2013

Global Marketplace

Du Juan of China Daily . “We will keep expanding our businesses [there].” Accordingly, the self-determined technology company ThyssenKrupp is currently engaged in five new projects in China: an engine components factory in Nanjing, Jiangsu province; an elevator factory in Guangdong province; a mechanical spring company in Chengdu; and separate camshaft and dampener projects in Shanghai. Citing the ‘improved sentiment toward the market’ of its clients, Taiwan’s China Steel raises prices yet again Announced 27 February, the domestic products of Taiwan’s largest steel producer by revenue would see an average price hike with April and May shipments of around US$28 per metric ton (mt). As well as an increase in the cost of raw materials. China Steel Corp (CSC) offered an upcoming seasonal spike in restocking demand and good prospects in the American and Chinese construction sectors as factors in the adjustment upward by an average 3.81 per cent. Staff reporter Camaron Kao of the Taipei Times noted that the measure would be the third consecutive price increase on CSC products – with the exception only of electro-galvanised steel sheets – over the preceding three months. CSC said the boost would help it mitigate the effect on profits of the rising cost of importing iron ore.

Steel German steelmaker Thyssen-Krupp, an old China hand, recasts itself as a technology company “While most steel companies seek to benefit from China’s large-scale infrastructure construction projects, one company has decided to capitalise on the country’s development by reducing its dependence on steelmaking.” Writing in China Daily , Du Juan identified this contrarian firm as Thyssen-Krupp AG, the German industrial giant with a long history of working in China. After developing a strong identity as an international steelmaker over the past century, the company is now reorganising itself into a technology-driven group. “We are not a steel company,” Heinrich Hiesinger, CEO of Thyssen-Krupp, declared to China Daily at an innovation and technology event near his firm’s headquarters in Düsseldorf. “I want people to consider us as a technology company rather than a steel producer.” To visitors, evidence of the “very clear path” the company is following – to become a tech-based corporation and industrial solution provider – abounded. Up to 4,000 ThyssenKrupp engineers were on hand to demonstrate the company’s work in science and technology. (“Less Steel, More Savvy,” 22 February) ThyssenKrupp’s dedication to its self-determined new role was apparent in the announcement, in October 2012, of the sale of its Tailored Blanks unit to Wuhan Iron and Steel Group Co, the fourth-largest steelmaker in China. Tailored Blanks makes lightweight steel sheets for the automotive industry, accounting for some 40 per cent of the global market for such products. The unit reported sales of $910mn in 2011. ThyssenKrupp had already, in January 2012, announced the sale of Inoxum, its stainless steel business, to the Finnish stainless producer Outokumpu Oyj. German media reports estimated the transaction at $3.5bn. ThyssenKrupp is now in talks with more than ten companies about selling its steel factories in Brazil and the US. The German company intends, however, to maintain the scale of its European steel business, profitable especially in such high- end products such as automotive steel plate. › “Our management philosophy is to produce lower quantities with higher profits,” Mr Hiesinger said, stressing ThyssenKrupp’s continued commitment to China even as he acknowledged the marked reluctance of Chinese manufacturers to pay top price for high-quality steel products. China accounts for about 5 per cent of his company’s revenue now, and he expects that to grow. “All the businesses we are running in China fit the local market well, but we are not satisfied with that,” Mr Hiesinger told

Specific price rises (US$/mt) are: $36.70 benchmark hot-rolled sheets and coils $30.20 cold-rolled sheets and coils $20.28 electrical sheets $23.60 steel bar and rod $30.30 hot-dipped, zinc-galvanised sheets

Calling attention to cheap steel plate imports from Japan, South Korea and India, among others, China Steel said it would only slightly increase – by $2.63/mt – the price of steel plates, used mainly in construction. The price of electro-galvanised sheets, which remained unchanged when CSC adjusted its prices in January, is set to increase by $26.90. “We kept the prices of electro-galvanised sheets unchanged [in January] because our clients were experiencing a dire financial situation,” CSC vice president Liu Jih-Gang told Mr Kao by telephone. “We decided to increase the prices [in February] because our clients’ sentiment toward the market has improved.” China Steel sells about 75 per cent of its output domestically, exporting most of the rest to China and Japan.

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May 2013