China: Shagang Steel’s 3rd Price Cut for Domestic Scrap in a Week’s Time

Shagang steel cuts scrap purchase price further RMB 50/MT today, witnessing a total price lowering by RMB 110/MT (USD 16) over a week’s period

Eastern China’s largest private ferrous scrap consumer and EAF steelmaker – Shagang Jiangsu Steel group has announced another price cut for all grades of domestic steel scrap procurement by RMB 50/MT (USD 7) effective from today 10th Aug’19. Notably, this is the third successive price cut announced this week on falling billet & rebar prices in China.

As per updates, Shagang steel is paying RMB 2,700/MT (USD 382) inclusive of 13% VAT for HMS 3 (6-10 mm thickness) delivered to headquarter works situated in Zhangjiagang north of Shanghai in China, down RMB 50/MT against the last report of RMB 2,750/MT on 8th Aug’19. While HMS 1 (thickness not less than 20 mm) and HMS 2 (6-10 mm thickness) stand at RMB 2,780/MT and RMB 2,740/MT respectively.

Chinese currency Yuan (RMB) has remained above 7 levels against USD since last 4-5 days. Following the lead of the largest privately owned steel mill, many leading scrap consumers in the eastern regions announced their scrap purchase price cuts by RMB 100-120/MT over this week.

China’s spot iron ore fines index dropped by around USD 13/MT and stood at USD 95/MT on 9^th Aug’19 against USD 108/MT levels on 03rd Aug’19. However, few reports indicate that these levels might come under pressure further in coming days. While square billet (150-150 mm) prices reported at RMB 3,500/MT (USD 496) ex- Tangshan, including VAT.