Shagang Steel, the largest steel enterprise in Jiangsu province in east China, lowered its scrap buying prices further by RMB 70/tonne ($11/t) across grades on 24 May’21. It may be recalled, the mill had lowered the prices by RMB 100/t ($16/t) last weekend. A steep decline in Chinese steel futures has resulted in falling domestic steel prices, triggering a decline in scrap purchase bids.
So far in the month of May’21, Shagang’s scrap purchase bids have come down by a total of RMB 500/t ($78/t).
After the 24 May’21 revision, the current price for HMS 6-10 mm stands at RMB 3,690/t ($574/t), inclusive of 13% VAT, delivered to its headquarters at Zhangjiagang, located in the north of Shanghai.
Chinese domestic market highlights
- Shagang Steel sharply cuts long steel offers: After the Shanghai Futures Exchange (SHFE) rebar Oct contracts fell by $82/t week-on-week (w-o-w), domestic billet prices saw a weekly drop by a similar amount. The company has slashed long steel offers by $47/t. The current prices of rebar (16-25 mm) are at RMB 5,850/t ex-mill, inclusive of taxes.
- Falling futures pull down Chinese domestic billet prices: Chinese domestic billet prices on 24 May’21 dropped by RMB 230/t ($36) vis-a-vis 21 May’21, as per SteelMint reports. Falling rebar futures contracts on the SHFE are pulling down domestic billet prices in China. Billet transactions witnessed were moderate, and finished steel prices showed a downtrend. Prices of the commonly-traded Q235 billets (150*150mm) were reported at RMB 4,920/t ($765/t) in Tangshan, including 13 % VAT.
- Chinese Imported scrap buyers adopt ‘wait & watch’ approach: Imported scrap trade to China remained dull in the past two-three weeks due to low buying interest and falling futures. Indicative bids were heard at $520/t CFR levels for the Japanese HRS 101 grade. However, no deals were reported as buyers preferred to stay out of the market.
- Iron ore spot prices continue to drop: The spot price of Fe 62% iron ore fines declined by $10.75/t to $200.1/t CFR China towards the end of last week, as steel futures weakened and continued their slide. Enquiries from mills are few as most choose to wait and watch.
Viewpoint
Market sources expect that scrap prices will decline further this week.
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