China’s leading electric arc furnace (EAF) steelmaker, Jiangsu Shagang Group, has increased its scrap purchase prices twice this week. Firm demand for finished steel with the resumption of production was the reason behind the hike in scrap procurement prices.
The steelmaker increased scrap purchase prices by RMB 150/t( $22/t) for all grades against the last revision on 15 August. After the revision, HMS (6-10 mm) prices are at RMB 3,370/t ($498/t) delivered to headquarters, including 13% VAT, effective from 17 August.
Factors supporting the price hike-
- Billet prices inch up: Steel billet prices in China’s Tangshan witnessed a rise of RMB 30/t ($4/t) to RMB 3,790/t ($559/t), inclusive of 13% VAT, on 16 August, as per data maintained with SteelMint.
- Rebar futures head north: China’s SHFE rebar futures contract for October delivery closed at RMB 4,153/t ($613/t) on 16 August, an increase of RMB 27/t ($4/t), d-o-d.
- Spot iron ore prices stable: Seaborne iron ore prices were stable on 17 August. The 62% Fe iron ore index stood at $104/t CFR North China.
- Imported scrap prices recover: Imported scrap prices rose by $10/t against the last closing. Prices of USA-origin shredded material stood at $434/t, while those of HMS were assessed at $414/t, both on a CFR basis.
Outlook
Considering that the construction activity in China is supportive, demand for scrap is likely to continue increasing in the weeks to come, resulting in a rise in bids for the raw material, SteelMint notes.
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