Shagang Group, China’s largest privately-owned steel producer in East China’s Jiangsu province, has kept its listed prices of major long steel products unchanged for the domestic market over February 1-10, though market sentiment has turned pessimistic with the prolonged Chinese New Year (CNY) break because of the outbreak of the Novel Coronavirus (2019-nCoV) in late January, Mysteel Global understands from market sources on Monday.
With the latest pricing policy, Shagang’s HRB400 16-25mm dia rebar is still priced at Yuan 3,880/MT ($554.3/t), the same as the last eleven days of January, and its HPB300 6-10mm high-speed wire rod still at Yuan 3,890/t, and HRB400 8-10mm bar-in-coil at Yuan 3,930/t, all in terms of EXW and including the 13% VAT.
Despite Shagang’s public announcement not to cut its list prices, Chinese steel market participants foresee China’s long steel prices or domestic steel prices in general to fall sharply when China’s steel market reopens probably on February 9-10, the office return dates that many provincial governments have strongly suggested to their local enterprises amid the virus outbreak, Mysteel Global understands.
The sudden outbreak of the 2019-nCoV prompted Beijing to extend the CNY holiday to February 2 from the original January 24-30 as part of the efforts to battle against the virus, and many construction sites in China have been asked to resume operations only after February 9-10 with some even not until early March.
“Many construction projects including the infrastructure projects may not restart until late February or even towards the end of February, much later than the governments’ suggestions just to play safe,” a market source in East China’s Shandong province said, and “the late revival of the domestic demand may force many steel traders to slash prices for inventories sales,” he predicted.
“The cautious optimism among steel traders before the CNY break has now all been replaced by the widespread pessimism,” he noted, which was strongly indicated with the choppy performance on China’s steel futures market on February 3, the first trading day after the lengthy CNY break.
The most traded May rebar contract on the Shanghai Futures Exchange (SHFE), for example, slumped Yuan 263/t or 7.5% from the settlement price on January 23, the last trading day before CNY holiday, closing the morning session of February 3 at Yuan 3,252/t.
Over February 1-10, Shagang has kept all the premiums for its other products unchanged as well, still charging an extra Yuan 160/t for HRB400 10mm dia rebar, Yuan 100/t more for 12mm dia rebar, an extra Yuan 250/t for both its 36mm dia and 40mm dia rebar, Yuan 30/t more for its anti-seismic rebar, another Yuan 350/t for HRB500 14-25mm dia rebar, and an extra Yuan 300/t for the HRB400 6mm dia bar-in-coil on top of the respective base prices of rebar, and bar-in-coil.
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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