Amid recovering prices in Chinese spot market, Shagang Steel raised its rebar prices by RMB 120/MT (USD 19) and domestic scrap purchase prices by RMB 100/MT (USD 16) respectively.
One of the largest ferrous scrap consumers in east China, Shagang Jiangsu Steel group has raised its scrap purchase prices by Chinese Yuan 100/MT (USD 16). After holding the scrap purchase price stable for almost a month’s time, the company has raised prices today. As per latest price updates received, Shagang is now paying RMB 2,300/MT (USD 365) inclusive of 17% VAT for HMS not lesser than 6 mm in thickness delivered to its headquarter works situated in Zhangjiagang Province in China.
In line with this, Shagang also hiked purchase prices for other grades of scrap by RMB 100/MT in latest price revision. Shagang is now paying RMB 2380/MT (USD 377) for premium grade HMS 1 scrap not lesser than 20 mm in thickness. While prices noted at RMB 2200/MT (USD 349) and RMB 2070/MT (USD 328) for scrap with specification 4-6 mm and 2-4 mm thickness respectively.
However, earlier to latest price revision, Shagang’s scrap purchase prices had remained unaltered for around four weeks’ time. The slowdown in export activities has reflected in lessen demand for scrap during last few weeks in China.
While in Mar’18, amid weakening finish steel prices in Chinese market the steelmakers have observed successive price cuts in China. Prices for HMS (6-10 mm thickness) scrap tumbled down to RMB 2200/MT on 27th Mar’18 from a peak price witnessed at RMB 2550/MT on 6th Mar’18. Thus, in just 21 days period, Shagang had observed slashing of scrap prices by total RMB 350/MT (USD 56).
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. According to statistics reported by the company, in 2017 Shagang Steel’s domestic ferrous scrap purchases recorded at 5.72 MnT which has witnessed a total increase of 135% Y-o-Y. In 2016, Shagang Steel registered total scrap purchases of 2.43 MnT while company forecasts its annual scrap purchase demand likely to exceed 7 MnT in 2018.
Few other major mills in eastern China like Nanjing Steel, Maanshan Steel and Xuancheng Steel have also increased their scrap buying prices by around USD 100/MT in China following Shagang’s price cut. While for other major provinces in China like Shandong, Anhui and Fujian domestic scrap buying prices have climbed up by RMB 100/MT respectively. For provinces like Shanghai, Guangdong, Tianjin and Zhejiang scrap prices have not revised yet and assessed unchanged.
Shagang Steel increases finish long prices for late April shipment – Shagang has raised the prices for its long steel products for shipment in late April. The mill will sell its HRB400 16-25mm rebar at RMB 3,940/MT over the April 21st-30th period, which is up RMB 120/MT (USD 19) from its last set of prices. Chinese finish steel demand seems to turn active with positive sentiments in the market.
China’s govt. slashes reserve ratios, boosts steel demand – Earlier last week, People’s Bank of China announced that it will slash reserve ratio on large commercial lenders by 100 basis points to ease out tighter credit conditions and improve liquidity. This created an optimistic market sentiment in Chinese iron & steel industry resulting in hike in iron & steel futures. Following this semi-finished and finished steel prices in China’s spot market also moved up.
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