The prices of some finished steel products in China’s domestic market have risen slightly, but the overall market atmosphere turned weak. As mentioned before, the recent price hikes have much to do with speculative sentiments, but there has been no substantial improvement in fundamentals.
The steel mills are operating with low profits and reduced production enthusiasm while the demand is also in a seasonally weak state. Neither the supply nor demand performance is good, and the market will remain at a low level dynamically looking for a bottom. It is expected that the domestic steel price will be featured with fluctuation in the near future.
Although the scrap prices have remained on the higher side. Recently most steel mills in Shandong, Shanxi, Guangdong, Jiangsu, Hebei, Gansu etc have seen an increase of RMB 30-60/MT for scrap purchase. In terms of delivered volume, the price increase has boosted the mentality of scrap traders as in the past two days; the overall arrival of scrap in the market has decreased significantly. However, due to the narrowed profit margin of steel mills, and the unsustainable rising price of finished steel, the rise of scrap is expected to end soon.
Shagang Steel lowered finish steel prices for early December, scrap prices remain unchanged – As per reports, Shagang is still paying RMB 2,420/MT (USD 348) inclusive of 16% VAT for HMS (6-10 mm thickness) delivered to headquarter works situated in Zhangjiagang province in China.
The mill is selling its HRB400 16-25mm rebar at RMB 4,100/MT (USD 596) over the December 1-10 period, sharp down RMB 500/MT (USD 73) from its last set of prices for late Nov’18 shipments on an ex-works basis, including VAT.
According to the independent EAF (full scrap), the cost of rebar is RMB 3,840/MT, which is the same as the previous trading day; the gross profit per ton of steel is RMB100/MT, an increase of RMB 20/MT compared with the previous trading day.
Electrode prices scenario: At present, the graphite electrode market is still stable on the whole, the in-plant GE inventory is not high, the shipment is normal, and the price of large-size UHP GE will remain stable in the short term.
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