China’s leading electric arc furnace (EAF) steelmaker, Jiangsu Shagang Group, has reduced its scrap purchase prices in June 2022 considering weak domestic finished steel sales and falling billets and finished steel prices to varying degrees amid tepid transactions. In line, the ongoing monsoon also impacted the construction activities in Jiangsu.
The steelmaker cut its scrap procurement prices by RMB 50/tonne (t) ($7/t), for all grades with immediate effect, sources confirmed.
With this downward correction, current prices of HMS (6-10 mm) stand at RMB 3,770/t ($560/t), including 13% VAT, delivered to headquarters.
Market scenario-
- Billet prices soften: Steel billet prices in China’s Tangshan fell sharply by RMB 90/t ($13/t) d-o-d on 13 June 2022 following a steep decline in rebar futures. Prices stood at RMB 4,430/t ($658/t), inclusive of 13% VAT.
- Rebar futures slump: According to data maintained with SteelMint, China’s SHFE re-bar futures contract for October 2022 delivery closed at RMB 4,691/t ($696/t) on 13 June, falling by RMB 102/t ($15/t) against last week’s closing.
- Imported scrap prices fall: Imported scrap prices, too, noticed a sharp fall of $10/t d-o-d on 13 June. Prices of Japanese H2 stand at $470/t CIF and USA-origin shredded material at $504/t CFR.
- Spot iron ore prices fall on low demand: As Chinese mills are looking to cut production due to limited seasonal demand, benchmark Fe 62% fines prices fell by nearly $5/t d-o-d to $136.6/t CFR China on 13 June.
Outlook
It is expected that scrap prices may fluctuate in the near term as the market is weak because both supply and demand are low.
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