China’s largest electric arc furnace (EAF) steelmaker, the Jiangsu Shagang Group, decreased its scrap buying prices on 20 December 2022. This is its fourth consecutive revision in December. On an overall basis, this month, prices are up by RMB 130/t ($19/t) including this cut.
The steelmaker, on 20 December, reduced prices by RMB 50/t ($7/t) for all grades against the last revision. After the latest revision, HMS (6-10 mm) prices are now at RMB 3,040/t ($436/t) delivered to headquarters, including 13% VAT, effective from 20 December.
Market highlights
- Imported scrap prices stable w-o-w: Prices of US-origin HMS and shredded scrap stood at $389/t and $409/t, respectively, stable w-o-w, CFR China.
- Local billets prices increase d-o-d: Domestic billets prices in China’s Tangshan increased by RMB 20/t ($3/t) d-o-d to RMB 3,710/t ($532/t), inclusive of 13% VAT, on 20 December.
- Rebar futures slightly up d-o-d: However, China’s SHFE rebar futures contract for May 2023 delivery closed on 20 December at RMB 3,939 /t ($565/t), marginally up by RMB 12/t($2/t) d-o-d.
- Iron ore spot prices up d-o-d: The Fe 62% iron ore index was at $110.5/DMT CFR North China on 20 December, slightly up $1.3/t from the last closing. The spot prices of iron ore in China rose d-o-d due to better import margins. There was limited seaborne buying interest as market participants were in a wait-and-watch mode by staying away amid rising Covid-19 cases in China.
Outlook
Scrap purchase prices might remain flexible at these levels till the Lunar New Year holidays in China, as demand and sales in the domestic market may be slow during this time.
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