China’s Shagang Steel Cuts Scrap Purchase Price Further USD 20 on Sinking Steel Prices

Eastern China’s largest ferrous scrap consumer – Shagang Jiangsu Steel group has slashed scrap purchase price successively by RMB 60/MT yesterday and RMB 80/MT today. Amid sharply falling finish steel prices steelmaker has reduced scrap prices further by RMB 140/MT (USD 20) witnessing five price cuts in Nov’18.

As per reports, Shagang is paying RMB 2,480/MT (USD 357) inclusive of 16% VAT for HMS (6-10 mm thickness) delivered to headquarter works situated in Zhangjiagang province in China, down RMB 140/MT as against last report of RMB 2,620/MT on 22nd Nov’18 last week.

In line with this, the prices for other grades of scrap also have come down by RMB 140/MT in last two revisions. It is paying RMB 2,580/MT (USD 371) for HMS 1 (thickness not less than 20 mm) while around RMB 2,380/MT and RMB 2,250/MT for melting scrap 4-6 mm & 2-4 mm thickness respectively. New prices stand at RMB 2,600/MT for charging scrap 1 and RMB 2,530/MT for HMS 2 (6-10 mm) inclusive of 16% VAT.

Domestic scrap prices tumble further in the major provinces – Following Shagang’s lead, leading scrap consumers like Maanshan, Zenith, Nanjing and Xingcheng steel reduced scrap purchase prices by RMB 120-150/MT in eastern China.

China’s steel prices on a free fall – Amid big losses in billet and futures markets, Chinese rebar prices continue falling further over past few days on rising inventories. While billet prices have already hit 18 month’s low and declined by about USD 110 in a month’s time. Few traders are offering 150 mm Q235 grade billet at RMB 3,120/MT (USD 450), ex Tangshan including VAT.

Recent Rebar prices in eastern China reported at RMB 3,720-3,800/MT (USD 535-547),ex- Shanghai, down RMB 210-250/MT from RMB 3,970-4,010/MT reported last. Rebar export offers assessed at USD 510-520/MT, FoB China, down USD 20-30/MT over the past few days.

Sharp price fall in billet prices over the weekend led to weakening sentiments and subsequently big drop of rebar futures in China. End users in construction sector kept prices minimum in anticipation of further drop and destocking activities.

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.