Shagang Steel in China has registered its second price drop for scrap purchase in a week’s time.
The largest ferrous scrap consumer in China, Shagang Jiangsu Steel group has cut its scrap buying prices by Chinese Yuan 60/MT (USD 9.24) today (i.e. 02nd Jan). As per latest price update, Shagang is now paying RMB 2,590/MT (USD 399) inclusive of 17% VAT for Heavy Melting Scrap (HMS 3) not lesser than 6 mm in thickness delivered to its works in Zhangjiagang Province in China.
Earlier to this, the company was fetching the same grade at RMB 2,650/MT (USD 408) including 17% VAT as per revision on 28th Dec’17.Thus this is second consecutive price drop company has witnessed in a weeks’ time.
Shagang Steel also cut the scrap purchase prices for HMS 1 scrap not lesser than 20 mm in thickness by RMB 60/MT in the latest price revision. Shagang is now paying RMB 2670/MT (USD 411) for HMS 1 registering the total drop of RMB 90 from the highest price level reached at RMB 2760/MT on 26th Dec’17.
In Dec’17, Shagang Steel had hiked scrap buying prices successively three times with the total rise of RMB 550/MT in scrap buying prices in parallel with continuously rising Rebar prices by Shagang group but after which in last two price cuts total prices have come down by RMB 90/MT (USD 14).
Following Shagang’s price cut, few other major mills in eastern China cut their scrap buying prices further. Sources are of the view that scrap prices are falling in China as they had been too high compared with the cost of steelmaking with the blast furnace. (The combined cost of steelmaking with using iron ore and coking coal.) Scrap prices had been hiked sharply in last one month’s time compared with respective price increase in coking coal and iron ore.
Shagang steel has an annual production capacity of 31.9 MnT iron, 39.2 MnT steel and 37.2 MnT rolled products. It manufactures leading steel products like wide heavy plate, hot-rolled strip coil, high-speed wire rod, large bundle of wire rod, ribbed steel bar, special steel round bar along with 60 series and more than 700 varieties with nearly 2000 specifications.
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