The largest ferrous scrap consumer in east China – Shagang Jiangsu Steel group has slashed its domestic scrap purchase price further by Chinese Yuan 50/MT (USD 7) effective from today (20th Nov). After witnessing a price cut last week, the steelmaker has observed another cut today as scrap prices continued downtrend amid falling finish steel prices and rising supply in the spot market in China.
As per reports, Shagang is paying RMB 2,680/MT (USD 386) inclusive of 16% VAT for HMS (6-10 mm thickness) delivered to headquarter works situated in Zhangjiagang province in China, down RMB 50/MT as against last report of RMB 2,730/MT on 13th Nov’18.
In line with this, the prices for other grades of scrap also have come down by RMB 50/MT in the latest revision. Shagang is paying RMB 2,780/MT (USD 400) for HMS 1 (thickness not less than 20 mm) while around RMB 2,450/MT and RMB 2,580/MT for melting scrap 2-4 mm & 4-6 mm thickness respectively. New prices stand at RMB 2,800/MT for charging scrap 1 and RMB 2,730/MT for HMS 2 (6-10 mm) inclusive of 16% VAT.
Shagang Steel is one of the leading steelmakers in China and with an annual production capacity of 31.9 MnT iron, 39.2 MnT steel and 37.2 MnT rolled products.
Domestic scrap prices continued downtrend in major provinces – Following Shagang’s lead, leading scrap consumers like Maanshan, Zenith, Nanjing and Xingcheng steel reduced scrap purchase prices by RMB 50-60/MT in eastern China.
Province-wise domestic scrap reference prices as on 20th Nov’18 –
| Domestic scrap HMS (6-10 mm), Prices in RMB/MT including 16% VAT | |||
| Province | Origin | Prices as on 20-Nov’18 | Change as against last report (13-Nov’18) |
| Shandong | Jinan | 2,660 | -80 |
| Jiangsu | Zhangjiagang | 2,680 | -50 |
| Fujian | Fuzhou | 2,630 | -60 |
| Anhui | Maanshan | 2,750 | -50 |
| Zhejiang | Taizhou | 2,710 | -50 |
| Guangdong | Guangzhou | 2,590 | -30 |
| Tianjin | Tianjin | 2,780 | 0 |
| Hebei | Handan | 2,520 | -200 |
Source: SteelMint Research; Exchange Rate: 1 USD = 6.94 RMB
Finish steel prices keep falling amid limited activity – China’s rebar prices dropped further in both the domestic and the export markets amid thin trading. Recent Rebar prices in eastern China gauged at RMB 4,250-4,300/MT (USD 613-620/MT), down RMB 150-170/MT as against the last report on 13th Nov’18. Rebar export offers assessed at USD 550-570/MT, FoB China. It is expected that high selling interest on rising supply may pull finish steel prices down further on bearish outlook.
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