Taiwanese mills will reduce steel production volumes by 10%- 20% from May until October amid a seasonal electricity price hike during the summer, according to market participants.

Taiwan imposes higher summer electricity prices in June, which normally influences mills to primarily operate during non-peak hours to receive government incentives that offset production costs.

“Mills are considered a high electricity consumption user and they face very high electricity price hikes, but if they do not operate during the day the government will give them some incentives,” a Taiwanese trader said.

Seaborne scrap deals for late May and early June shipment slowed in the week to April 26, with a mill source saying: “It is the end of the month and demands are fulfilled.”

“During the period of power saving cuts every year, the output of steel plants will be reduced, and the amount of production reduction for each steel plant is different,” another source from a second Taiwanese mill said.

In June 2023, Taiwanese imports of ferrous scrap fell about 18% on the month to 64,299 mt, data from S&P Global Market Intelligence’s Global Trade Atlas showed.