China’s largest electric arc furnace (EAF) steelmaker, the Jiangsu Shagang Group, lifted its scrap buying prices on 7 February 2022. This is the first revision after 30 December, 2022. After a gap of over a month, the company raised its scrap purchase prices taking the opportunity of the Chinese New Year holidays.
Resumption of market activities post-holidays has been slow, which is impacting both demand and logistics in the country.
The steelmaker increased prices by RMB 80/tonne ($12/t) for all grades against the last revision. After the latest revision, HMS (6-10 mm) prices are now at RMB 3,200/t ($472/t) delivered to headquarters, including 13% VAT, effective from 7 February.
The company also increased rebar prices by RMB 200/t ($29/t), while wire rods and coiled rebars prices increased by RMB 150/t ($22/t) for early-February sales.
Market highlights
- Imported scrap prices up m-o-m: Prices of US-origin HMS and shredded scrap stood at $439/t and $459/t, respectively, up by $32/t w-o-w, CFR China.
- Local billets prices down m-o-m: Domestic billets prices in China’s Tangshan were down by RMB 10/t ($1/t) m-o-m to RMB 3,770/t ($555/t), inclusive of 13% VAT, on 6 February.
- Rebar futures down m-o-m: China’s SHFE rebar futures contract for May 2023 delivery closed today at RMB 4,049/t ($597/t), a decrease of RMB 56/t ($8/t) m-o-m.
- Iron ore spot prices down d-o-d: Spot prices of benchmark iron ore Fe 62% fines declined $2.2/t d-o-d to $124.05/t CFR China on 6 February owing to weaker-than-expected downstream steel demand. Steel demand remained poor following the Lunar New Year holidays, falling short of market forecasts. Despite increasing seaborne trading activity, iron ore prices decreased d-o-d.
Outlook
After the Lunar New Year holidays, the Chinese market expects to have some busier trade flows and scrap purchase prices might see some traction due to increased demand.
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