China’s Shagang Steel Slashes Scrap Purchase Price by USD 8/MT

Shagang has rolled over the prices for its long steel products for shipment in late May.

One of the largest ferrous scrap consumers in east China, Shagang Jiangsu Steel group has cut its domestic scrap purchase prices by Chinese Yuan 50/MT (USD 8) today. After witnessing price hike of RMB 100/MT on 3rd May’18, the company has slashed its prices today amid weakening global scrap prices and lack of upward momentum in domestic demand for finish steel in China. As per latest price updates received, Shagang is now paying RMB 2,350/MT (USD 368) 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 slashed purchase prices for other grades of scrap by RMB 50/MT in the latest price revision. Shagang is now paying RMB 2450/MT (USD 384) for prime scrap (6-10 mm) and RMB 2430/MT (USD 381) for HMS 1 (thickness not less than 20 mm). While new prices stood at RMB 2250/MT (USD 352) and RMB 2120/MT (USD 332) for melting scrap with specification 4-6 mm and 2-4 mm thickness respectively inclusive of 17% VAT.

Shagang witnessed two successive price hikes each of RMB 100/MT on 23rd Apr and 3rd May amid rising in finish steel and billet prices in China over which restocking activities for scrap by Chinese steel mills surged sharply, however, this situation turned soon and the scrap prices have moved down now after remaining at limited peak for almost three weeks.

Province-wise domestic HMS scrap reference prices as on 21st May’18 –

Source : SteelMint Research; Exchange Rate: 1 USD = 6.38 CNY

Shagang rolls over finish long prices for late May shipment – Shagang has rolled over the prices for its long steel products for shipment in late May. The mill will sell its HRB400 16-25mm rebar at RMB 4,140/MT (USD 649) over the 21st-31th May period, unchanged from its last set of prices. Shagang also kept prices unchanged for wire rod from mid-May, taking HPB300 6.5 mm wire rod prices to RMB 4,350/MT (USD 681), both the prices are on the ex-works basis including 17% VAT.

Shagang could have kept the prices unchanged for late May shipments on lack of upward momentum in spot prices in China. The demand in China’s domestic rebar market remained weaker than expected during the middle of May. However, finish steel demand likely to remain active over the falling inventories in hand amid strong steel futures.

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. In 2017 Shagang Steel’s domestic ferrous scrap purchases recorded at 5.72 MnT as against 2.43 MnT in 2016, while company forecasts its annual scrap purchases likely to exceed 7 MnT in 2018.