China: Shagang Steel cuts scrap price by $11/t due to weak finished steel demand

China’s leading electric arc furnace (EAF) steelmaker, Jiangsu Shagang Group, decreased its scrap buying prices for the second time in October 2022. The steelmaker slashed scrap purchase prices by RMB 80/t( $11/t) for all grades against the last revision on 10 October. After the latest revision, HMS (6-10 mm) prices currently stand at RMB 3,010/t ($420/t) delivered to headquarters, including 13% VAT, effective from 12 October.

According to sources, prices fell due to weak demand for finished steel after the national holidays. The company trimmed the prices as it might take some time to restore the normal demand in the market as per the current scenario.

Other market updates

• Billet prices dip: Steel billet prices in China’s Tangshan stood at RMB 3,670/t ($512/t), however, the prices fell by RMB 50/t d-o-d, inclusive of 13% VAT on 11 October, as per data maintained with SteelMint.
• Spot iron ore prices fall marginally: Seaborne iron ore prices fell on downstream steel demand. The 62% Fe iron ore index stood at $97.05/t CFR North China, down by $2/t d-o-d.
• Imported scrap prices stable: Prices of Japan-origin H2 material stood at $355/t d-o-d.
• Rebar futures move downwards: China’s SHFE rebars futures contract for January delivery closed on 11 October at RMB 3,754/t ($524/t), a decrease of RMB 20/t ($3/t) as against the last closing.

Outlook: The market is going to take time for improvement as demand with respect to supply is low and recovering in a sluggish manner. Prices may increase due to the ongoing construction season in China.