China Steel Corp (CSC, 中鋼), the nation’s biggest integrated steelmaker, on Wednesday reported a pretax profit of NT$3.31 billion (US$102.6 million) for the second quarter of this year, as recovering steel prices and margin expansion helped cap four consecutive quarters of losses.

The company reported a pretax loss of NT$967 million in the first quarter amid price surges in raw materials, including coking coal and iron ore, as well as higher freight and energy prices due to the US-Iran war in the Middle East. It posted a pretax loss of NT$2.69 billion a year earlier.

The Kaohsiung-based company’s pretax profit was NT$1.46 billion for last month, up 8 percent from NT$1.35 billion in May.

However, shipments dipped 21 percent to 535,325 tonnes from 673,651 tonnes the previous month.

Last quarter, shipments were little changed at about 1.9 million tonnes compared with the previous month’s 1.84 million tonnes, the company said.

On an annual basis, shipments fell 5 percent from 2 million tonnes, it said.

CSC said it expects shipments this quarter to fall slightly from last quarter due to a 50 percent tariff on steel imports in the US and Europe’s 47 percent cuts in tariff-free steel import quotas.

The third quarter is also a slow season for the global steel industry, it added.

The company would closely monitor the impact of increases in steel supply to Asia after shipments to the US and Europe are curbed by the new tariff policies, it said.

“We are cautiously optimistic about the third quarter,” CSC vice president Yang Yueh-kun (楊岳崑) told investors on June 24.

The company expects operating costs to stabilize as prices of coking coal and iron ore are to move in narrow ranges of about US$240 to US$100 per tonne respectively in the second half of this year, retreating from their peaks in the first quarter, it said.

Domestic demand is projected to improve as Kuozui Motors Ltd (國瑞汽車) is to assemble Toyota Motor Corp vehicles in Taiwan for export to Japan, said CSC, which supplies 80 percent of Kuozui’s steel.

The auto company has for years assembled Toyota cars for the Taiwanese market, it said.