China’s largest EAF steelmaker- Shagang Steel has raised its scrap purchase price by RMB 50/t ($8) for all grades, effective from today (26th Nov’20). This is the company’s third price hike in Nov’20. Prices are hovering at over three-years high, as per data maintained with SteelMint.
The purchase price for HMS (6-10 mm) now stands at RMB 2,940/t ($448), inclusive of 13% VAT, delivered to headquarters works at Zhangjiagang North of Shanghai in China. While price of other grades including HMS (10-20 mm) thickness stands at RMB 2,970/t ($452) and HMS (not less than or equal to 20 mm) thickness stands at RMB 3,000/t ($456).
Factors resulting in scrap price hike –
- Tight supplies – In eastern China, market sentiments have been affected by environmental protection and off-season factors. Scrap supply is affected by snowy and rainy weather.
- Rebar futures close higher – SHFE rebar futures Jan’21 futures contract closed higher by RMB 19 today to RMB 3,884.
- Spot iron iron ore prices up marginally – Spot iron ore price for Fe 62% fines yesterday inched up by $0.4 d-o-d and settled at $128.15/t CFR China. Rising futures prices amid restocking demand, supported the spot price.
Outlook – China is likely to roll out national standard on “recyclable steel raw materials by this year-end, according to sources. An industry expert at the conference held on 13 Oct’20 in Shanghai said that the establishment of such standard will help coordinate the usage of recyclable steel raw materials both in and outside China and guarantee the promotion of a healthy development of Chinese steel industry. This may ease ferrous scrap imports in China in the coming months.
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