Feng Hsin Steel, Taiwan’s largest rebar producer, has decided to raise its rebar list price and buying price of locally-sourced scrap both by TWD 300/tonne ($10.8/t) on week over June 28-July 2, after having remained both the prices unchanged for a few weeks, mainly to narrow the gap between the local scrap supplies against the global market, a company official confirmed.
For sales until Friday, Feng Hsin’s list price for 13mm dia rebar will be at TWD 23,000/t EXW, or having ended the rollover since late May, and the mini-mill, headquartered in Taichung, Central Taiwan, will be paying TWD 11,600/t for locally-sourced HMS 1&2 80:20 scrap after having kept it at TWD 11,300/t for the prior four weeks, according to the official.
Feng Hsin usually adjust its rebar and scrap prices at more or less the same pace because of their close correlation, and the latest increase has been decided on even though global scrap prices have shown signs of softening as the gap still exists, Mysteel Global learned.
As of June 28, the price of US-sourced HMS 1&2 80:20 scrap, for example, was at $458/t CFR Taiwan, down $2/t on week after having gained for two weeks, and that of Japan-origin H2 scrap fell more by $17/t on week to $498/t CFR Taiwan after a total gain of $45/t over the prior three weeks, local market source said.
“Either we increase the prices, or the local scrap suppliers will stay put-off from delivering much to us, as scrap buying prices of local steel mills have been lower (than the global scrap price),” the Feng Hsin official explained, adding too that the steel mill had not raised its scrap procurement prices when the global scrap prices had been strengthening.
However, the parallel increment in rebar price may be resisted by the local end-users especially now that the global scrap prices have been softening, he admitted. “We will probably give some discounts to the downstream customers this week to facilitate sales, so the actual increment (in rebar sales price) will be lower than TWD 300/t,” he added.
Taiwan’s steel supplies in the coming weeks, though, may decline, as local electric-arc-furnace steel producers tend to shut down for maintenance in summer months as Taiwan usually faces power supply shortage and there is usually power rationing and power surcharges for industrial use.
Written by Nancy Zheng, zhengmm@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint Research.
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