Amid rally in finish steel prices in Chinese spot market, Shagang Steel has raised domestic scrap purchase prices today by RMB 100/MT (USD 16) following the hike in its rebar prices by RMB 130/MT (USD 20).
One of the largest ferrous scrap consumers in east China, Shagang Jiangsu Steel group has raised its scrap purchase prices by Chinese Yuan 100/MT (USD 16). After witnessing price rise of RMB 100/MT on 23rd Apr’18, the company raised its prices further today. As per latest price updates received, Shagang is now paying RMB 2,400/MT (USD 377) inclusive of 17% VAT for HMS (6-10 mm in thickness) delivered to its headquarter works situated in Zhangjiagang Province in China.
In line with this, Shagang also hiked purchase prices for other grades of scrap by RMB 100/MT in latest price revision. Shagang is now paying RMB 2500/MT (USD 393) for prime scrap (6-10 mm) and RMB 2480/MT (USD 390) for HMS 1 (thickness not less than 20 mm). While prices noted at RMB 2300/MT (USD 361) and RMB 2170/MT (USD 341) for melting scrap with specification 4-6 mm and 2-4 mm thickness respectively.
Shagang has witnessed two successive price hikes each of RMB 100/MT on 23rd Apr’18 and today through which the scrap buying prices have increased by RMB 200/MT against the bottom reached at RMB 2200/MT for HMS (6-10 mm). Over weak demand, the scrap prices had remained at the bottom for almost four weeks in China.
Following Shagang’s price hike, few other major mills in eastern China like Yonggang Steel, Maanshan Steel and Xuancheng Steel have also increased their scrap buying prices by around USD 100/MT. For other major provinces like Anhui, Zhejiang and Shanghai domestic scrap buying prices have climbed up by RMB 100/MT, RMB 50/MT and RMB 50/MT respectively. While for provinces like Guangdong and Tianjin scrap prices have noted not revised yet.
Shagang Steel is one of the leading steelmakers in China and has an annual production capacity of 31.9 MnT iron, 39.2 MnT steel and 37.2 MnT rolled products. According to statistics reported by the company, in 2017 Shagang Steel’s domestic ferrous scrap purchases recorded at 5.72 MnT which has witnessed a total increase of 135% Y-o-Y. In 2016, Shagang Steel registered total scrap purchases of 2.43 MnT while company forecasts its annual scrap purchase demand likely to exceed 7 MnT in 2018.
Shagang increases finish long prices for early May shipment – Shagang has raised the prices for its long steel products successively for shipment in early May also. The mill will sell its HRB400 16-25mm rebar at RMB 4,070/MT (USD 640) including 17% VAT over the May 1st-10th period, which has increased by RMB 130/MT (USD 20) from its last set of prices. Which reflects total price increase of RMB 250/MT (USD 39) since late April for rebar.
Shagang also hiked its prices for wire rod by RMB 150/MT, taking HPB300 6.5 mm wire rod prices to RMB 4150/MT (USD 652), including 17% VAT.
Chinese finish steel demand seems to remain active in response to falling inventories in hand amid strong steel futures.
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