China’s largest electric arc furnace (EAF) steelmaker, Jiangsu Shagang Group, raised its scrap buy prices on 8 November 2022 after consecutively cutting prices by a total of $66/t from 12 Oct’22.
The steelmaker has increased prices by RMB 100/t ($14/t) for all grades against the last revision on 31 October. After the latest revision, HMS (6-10 mm) prices stand at RMB 2,710/t ($374/t) delivered to headquarters, including 13% VAT, effective from 8 November.
The company has increased its bid prices to start stocking up for the winter season. Due to a decline in scrap deliveries recently, mills continued to operate at a loss, with hand-to-mouth purchase of required material. Similarly, Covid protocols are a bit tight in China nowadays.
Chinese market overview-
- Local billets prices slightly up: Domestic billets prices in China’s Tangshan increased by RMB 20/t ($3/t) w-o-w to RMB 3,470/t ($479/t), inclusive of 13% VAT on 7 November.
- Rebar futures down d-o-d: China’s SHFE rebar futures contract for January 2023 delivery closed today at RMB 3,535/t ($488/t), down RMB 27/t ($3.72/t) d-o-d.
- Iron ore spot prices down d-o-d: The 62% Fe Iron Ore Index was at $87.95/dry mt CFR North China on 7 November, down 10 cents/dmt from 4 November. Prices are on downtrend as import margins shrink and market demand declines.
- Imported scrap prices down: Prices of US-origin HMS and shredded material stood at $374/t and $ 394/t, respectively, declining by $4/t d-o-d.
Outlook
Jiangsu mills are still struggling to make profits due to weak finished steel demand. However, Shagang Steel needs more scrap before the winter season, thus, it is expected that prices will rise further.
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