Feng Hsin Steel Co (豐興鋼鐵) yesterday said that additional public infrastructure projects and building permits would boost its rebar sales this year, offsetting a decline in round bar and merchant bar sales.
Rebar sales climbed 13.49 percent year-on-year in the first eight months, while sales of merchant and round bars dropped 13.2 percent and 29.34 percent respectively, marketing department manager Potter Chuang (莊文哲) told an investors’ conference in Taipei.
However, the nation’s steel market remains sluggish, as overall imports and exports of scrap, rebar, merchant bars and round bars have all declined this year, Chuang said.
“We have seen the largest declines in sales and profits since the financial crisis in 2008,” he said.
Feng Hsin’s net income dropped by 18.03 percent annually to NT$1.12 billion (US$36.07 million) in the first half of the year, while earnings per share fell from NT$2.35 to NT$1.93, assistant vice president and spokesperson Derek Cheng (成德懿) said.
Gross margin decreased 2.7 percentage points to 10.5 percent due to lower shipments of high-margin round bars, he said.
Rebar remains Feng Hsin’s largest product, accounting for 46 percent of total sales in the first eight months, compared with round bar’s 28 percent and merchant bar’s 26 percent, Chuang said.
The Taichung-based company has two arc furnaces with capacity of 85 tonnes and 100 tonnes each. It is an upstream steel provider for local machine and transmission tools, as well as construction and auto part companies.
As clients in the machine tool industry are still depleting inventories, the company said it would focus on product quality and portfolio improvement, and expects overall domestic demand to improve next year.