The surge in Taiwan’s electricity prices from April will raise steelmaking costs, and the central bank’s interest rate of half a yard on March 23 may slow down steel demand from the automobile and construction industries.

Chaodong Weng, chairman of Taiwan’s China Steel Corporation (CSC), said that the electricity price increase and the interest rate hike are still affordable for steel enterprises and have limited impact on upstream steel mills. However, the higher interest rate will affect home buyers with loans, which will further affect the terminal construction and downstream steel demand. The extent of the impact remains to be seen.

Market participants said that steel prices have started to recover since this year. With improved downstream demand, steel mills' gross profits will also get better.