Due to the weakening steel demand in the Taiwanese domestic market on the back of the global financial crisis, leading steel companies in Taiwan are currently considering the issue of production cuts - as the future development of the steel markets still remains uncertain, with customers abstaining from concluding bookings.
Factories that have already decided to cut production for Q4 include Feng-Hsin, TongHo and Wei-Chih; however, the actual extent of the reductions has not been clarified yet. Reports from Taiwan indicate that the cuts will be dependent on the order situation. Most market players think that Feng-Hsin will reduce its production operations by one third, and even by one half if necessary.
Market insiders estimate that most EAF/deformed bar mills will cut one third or one half of their total designed capacities, especially for medium scale mills. As for Feng-Hsin and Tong-Ho, they might maintain most of their production allocation for sections, as the order situation may be better than that for debar.