China’s leading electric arc furnace (EAF) steelmaker, Jiangsu Shagang Group, has trimmed its scrap purchase prices after three weeks. The steelmaker slashed scrap purchase prices by RMB 20/t($3/t) for all grades against the last revision on 31 August. After the latest revision, HMS (6-10 mm) prices are at RMB 3,120/t ($440/t) delivered to headquarters, including 13% VAT, effective from 22 September.
According to sources, prices fell due to a decline in rebar and steel prices, followed by an increase in scrap supplies to steelworks, which led to lower demand in the market for finished and semi-finished steel.
Despite the boom in real estate and construction, the sluggish economy played spoilsport which saw mills experiencing massive losses.
Factors impacting prices
- Billet prices down: Steel billet prices in China’s Tangshan witnessed a fall of RMB 150/t ($21/t) to RMB 3,590/t ($506/t) in the last 3 weeks, inclusive of 13% VAT, on 21 September, as per data maintained with SteelMint.
- Spot iron ore prices edge down: Seaborne iron ore prices were down by $5/t on 21 September as against 29 August, as downstream steel demand is yet to improve. The 62% Fe iron ore index stood at $96.4/t CFR North China.
- Rebar futures move downwards: China’s SHFE rebar futures contract for January delivery closed on 21 September at RMB 3,664/t ($520/t), a fall of RMB 301/t ($42/t) as against 29 August.
- Imported scrap prices dip: Meanwhile, prices of Japan-origin H2 material stood at $385/t, a notable fall of $5/t against 29 August. However, imported scrap prices are largely unchanged against the last closing.
Outlook: The market may continue to be under pressure, and it is anticipated that scrap prices will see a downward movement for a short period.
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