Amid sharply tumbled finish steel and billet prices in China and recently confirmed anti-dumping duty by US government on Chinese goods, major steelmakers slashed scrap purchase prices further by RMB 150-200/MT (USD 24-32) in China.
One of the largest ferrous scrap consumers in China, Shagang Jiangsu Steel group has slashed its scrap purchase prices further by Chinese Yuan 150/MT (USD 24). As per latest price updates received, Shagang is now paying RMB 2,250/MT (USD 356) inclusive of 17% VAT for HMS not lesser than 6 mm in thickness delivered to its headquarter works in Zhangjiagang Province in China.
In line with this, Shagang Steel also cut purchase prices for other grades of scrap by RMB 150/MT (USD 24) in latest price revision. Shagang is now paying RMB 2330/MT (USD 369) for premium grade HMS 1 scrap not lesser than 20 mm in thickness. While prices noted at RMB 2150/MT (USD 341) and RMB 2020/MT (USD 320) for scrap with specification 4-6 mm and 2-4 mm thickness respectively.
In Zhejiang province, scrap purchase prices have fallen by upto RMB 260/MT (USD 41) in Taizhou. While other major provinces in China like Anhui, Tianjin and Shanghai domestic scrap buying prices have fallen significantly down by upto RMB 160/MT, RMB 130/MT and RMB 150/MT respectively.
Shagang scrap purchase prices (6mm-10mm) had reached the peak at RMB 2550/MT on 6th March. Thus in last 20 days, Shagang has recorded its sixth consecutive price fall through which prices have dropped sharply by total RMB 300/MT(USD 48).
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 eastern China like Nanjing Steel, Maanshan Steel and Xuancheng Steel have also reduced their scrap buying prices by around USD 25/MT in China following Shagang’s price cut.
Weak Chinese finish steel prices and increasing inventories –
Chinese finish steel demand remains weak again this week. China’s reference index for rebar export offers declined by USD 7/MT to USD 551/MT, FoB. However, rebar and wire rod inventories with Chinese major steel mills are increasing sharply leading to a matter of concern for most of the steel mills.
HRC export offers from China have also declined by USD 15-20/MT last week which were assessed in the range of USD 580-590/MT, FoB China while domestic prices gauged at RMB 3,760-3,800/MT (ex-works) in eastern China.
Over the weakening of Chinese finish steel demand and ample scrap inventories in hand, the major steelmakers in China have no other option than to cut scrap prices successively.
Spot billet (150*150 mm, Q235) prices in Tangshan tumbled by RMB 140-200/MT in a couple of days. Prices assessed at RMB 3,370/MT (including 17% VAT) for domestic and export offers assessed at USD 525-530/MT, FoB China
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