Shagang Group, China’s leading long steelmaker headquartered in East China’s Jiangsu province, has raised its long steel list prices by Yuan 150-200/tonne ($23.5-31.4/t) from the prior ten days for domestic sales over December 11-20, which has confused some market sources though some others have viewed the substantial rise in a subdue steel consumption period as the solution to cover its rising scrap cost.
With the latest price adjustments, Shagang’s HRB400 16-25mm rebar is priced at Yuan 5,000/tonne, up Yuan 200/t from December 1-10, and both HPB300 6-10mm wire rod and HRB400 8-10mm bar-in-coil have their prices up Yuan 150/t in ten days to Yuan 5,210/t and Yuan 5,300/t respectively for domestic sales over December 11-20, according to the company release. All the prices are in terms of EXW and including the 13% VAT.
Some China’s steel market sources expressed confusion at such a substantial rise in Shagang’s long steel prices. “I can hardly figure out why Shagang can afford to take such a strong stance, especially when domestic long steel sales have been poor at the moment,” a Shagang’s sales agency in Jiangsu said.
“Traders are refusing to stock up, expecting steel prices to come down, and even for those ongoing construction sites, a lot of them are suffering from limited liquidity,” he added, arguing, “even though Beijing’s recent policies are interpreted to ease money constraints, it will take some time to show any impact in the market.”
China’s spot steel prices had been up on week over December 6-10, but signs of softening recurred on December 9, as shown by the HRB400E 20mm rebar in Shanghai, a market still with decent trading volume even in December, as the price was assessed by Mysteel at Yuan 4,800/t including the VAT as of December 10, or down Yuan 70/t over December 9-10 after it rebounded to Yuan 4,870/t.
Shagang’s latest price rise may have had to do with its latest steel scrap price increment starting December 11 by Yuan 100/t after 10 rounds of cuts by Yuan 620/t in total since October 22, market sources indicated.
Written by Olivia Zhang, zhangwd@mysteel.com
This article has been published under an exchange agreement between MySteel Global and SteelMint.
Leave a Reply