Feng Hsin Steel, Taiwan’s largest rebar producer, trimmed its buying price for locally-sourced ferrous scrap by another TWD 300/tonne ($11/t) on Monday for purchases over May 31-June 4 to reflect the weakness in the global market. The mill kept its rebar list prices unchanged for this week, however.
Before the regular price adjustment on Monday, the mini-mill headquartered in Taichung, Central Taiwan, had steadily lowered its buying price for local scrap by a total of TWD 600/t over May 28-29 on noting the fall in scrap prices internationally, a company official confirmed.
Thus, until this Friday Feng Hsin is paying TWD 11,300/t for local HMS 1&2 80:20 scrap, lower by TWD 900/t in total on week, while its list price for 13mm dia rebar will stay at TWD 22,700/t EXW, the same level as in the prior week.
As of May 31, the price of US-sourced HMS 1&2 80:20 scrap had declined by $15/t on week to $460/t CFR Taiwan, and that of Japan-origin H2 scrap had slipped for the second week by another $20/t on week to $470/t CFR Taiwan, a local market source said.
“Rebar sales had already slowed last week with the fall in scrap prices in markets outside Taiwan, but we still decided to hold our rebar list price at the current level this week to monitor the market change,” Feng Hsin’s official explained. The steelmaker is mindful of the fact that rebar prices being charged by mills in southern Taiwan are TWD 600-700/t higher than its own, so it sees no urgency in paring its rebar prices. In fact, it hopes to narrow the gap with its southern counterparts, Mysteel Global understands.
Meanwhile, effective June 1 Taiwan’s annual power supply rationalization scheme came into force, requiring heavy industrial power consumers such as local EAF mills to reduce consumption to ensure stable electricity supplies for households. Consequently, scrap consumption among local mini-mills is expected to decline from now till the end of September when the scheme ends, Mysteel Global noted.
“Local scrap suppliers are active in selling after they’ve noted the weakness in the global (scrap) market,” the official added. “This gives us more opportunity to lower our buying price (for locally scrap), though during the summer power restriction period, we usually reduce purchases of imported scrap first.”
Written by Nancy Zheng, zhengmm@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint Research.
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