China’s Shagang Steel Cuts Scrap Purchase Prices by USD 5/MT

Shagang Steel has cut domestic scrap purchase prices twice by USD 5/MT each in last couple of days over the slowdown in demand in finish steel.

One of the largest ferrous scrap consumers in China, Shagang Jiangsu Steel group has reduced its scrap buying prices further by Chinese Yuan 60/MT (USD 10) through the last two successive price cuts observed on 16th and 19th March respectively. As per latest price updates received, Shagang is now paying RMB 2,430/MT (USD 384) inclusive of 17% VAT for heavy melting scrap not lesser than 6 mm in thickness delivered to its headquarter works in Zhangjiagang Province in China.

Shagang Steel also cut purchase prices for other grades of scrap total by RMB 60/MT (USD 10). Shagang is now paying RMB 2510/MT (USD 497) for premium grade HMS 1 scrap not lesser than 20 mm in thickness. While prices are at RMB 2330/MT (USD 368) and RMB 2200/MT (USD 348) for scrap with specification 4-6 mm and 2-4 mm thickness respectively.

Notably, Shagang has witnessed four price cuts in last 15 days’ time, through which scrap prices have dropped by RMB 120 (USD 20) over the weakening of Chinese finish steel demand and falling prices. Also, scrap inventories are on higher side for most of the steelmakers in China.

Shagang Steel is one of the leading steelmakers in China and has an annual production capacity of 31.9 MnT iron, 39.2 MnT steel and 37.2 MnT rolled products.

Few other major mills in China like Nanjing Steel, Maanshan Steel and Xuancheng Steel have also reduced their scrap buying prices following Shagang’s price fall. For major provinces in China like Anhui, Guangdong and Zhejiang domestic scrap buying prices have decreased by upto RMB 60/MT, RMB 50/MT and RMB 60/MT respectively.

Chinese steel prices fall on dull demand and rising inventories –

Chinese finish steel demand remained weak again last week. Currently, Chinese rebar export offers are at USD 565/MT, FoB. Rebar prices in domestic markets fell down by USD 10-15/MT W-o-W in China.

Rebar/wire rod inventories with Chinese major steel mills increased to 4.8 MnT on 16 Mar’18 up by 0.14 MnT a week ago.