Eastern China’s largest EAF steelmaker- Shagang Steel has raised scrap purchase price today by RMB 100/t ($15) for all grades. The price for HMS (6-10 mm) now stands at RMB 3,390/t ($523), inclusive of 13% VAT, delivered to headquarters. Prices for other grades such as HMS (10-20 mm) thickness stands at RMB 3,420/t ($528) and HMS (not less than or equal to 20 mm) thickness stands at RMB 3,450/t ($533).
Reasons behind the price hike –
- Tighter domestic scrap availability – Scrap deliveries to Chinese based mills have remained on the lower side after CNY holidays due to difficulty in scrap collection.
- Shagang Steel lifts rebar price by RMB 150 ($23) for early- Mar’21 sales – Shagang Steel has raised its construction steel prices on 01 March for early-Mar’21 sales. Rebar (16-25mm) price has been increased by RMB 150 to RMB 4,850/t. Hike in raw material cost along with robust demand has pushed up prices.
- Chinese domestic billet prices largely stable – Billet prices in the Tangshan market (Northeast China) yesterday stood at RMB 4,270/t ($660) inclusive of 13 % VAT. Prices shot up after markets reopened after CNY holidays.
- Spot iron ore price remains range bound – Spot iron ore price for Fe 62% fines yesterday decreased by $2.3 d-o-d to $174.35/t CFR China on slow demand recovery for the raw material from end-users. The pollution-related production and transportation curbs in Tangshan put a dampener on mills’ restocking. Prices have remained largely range-bound in the last one week.
Dalian iron ore futures today picked up with the most-active May contract closing higher at RMB 1,154.5/t, up by RMB 22 d-o-d. Iron ore futures for Apr month delivery in Singapore Exchange remained range-bound at $172.55/t.
Outlook – It is expected that scrap price may continue to increase further in the near term.
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