China's Shagang Steel Slashes Scrap Purchase Price USD 9 on Falling Steel Prices

Eastern China’s largest ferrous scrap consumer - Shagang Jiangsu Steel group has slashed the prices for its finish long steel products up to USD 26/MT for late November shipment

Amid falling finish steel prices steelmaker has reduced scrap prices further by RMB 60/MT (USD 9) witnessing third price cut in November.

As per reports, Shagang is paying RMB 2,620/MT (USD 378) inclusive of 16% VAT for HMS (6-10 mm thickness) delivered to headquarter works situated in Zhangjiagang province in China, down RMB 60/MT as against last report of RMB 2,680/MT on 20th Nov’18.

In line with this, the prices for other grades of scrap also have come down by RMB 60/MT in the latest revision. It is paying RMB 2,720/MT (USD 393) for HMS 1 (thickness not less than 20 mm) while around RMB 2,390/MT and RMB 2,520/MT for melting scrap 2-4 mm & 4-6 mm thickness respectively. New prices stand at RMB 2,740/MT for charging scrap 1 and RMB 2,670/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 60-80/MT in eastern China.

Shagang cuts long steel prices for late-Nov shipments -In last couple of days China’s spot market prices for rebar and billet have come down sharply on rising supply.

The mill is selling its HRB400 16-25mm rebar at RMB 4,600/MT (USD 662) over the November 21-30 period, down RMB 180/MT (USD 26) from its last set of prices for mid-Nov’18 shipments.

While it is selling its HPB300 wire rod at RMB 4,660/MT (USD 672) over the same period 11th-20th Nov’18, down RMB 150/MT (USD 22) from its last set of prices during mid-November. Both prices are on an ex-works basis, including VAT.

Recent Rebar prices in eastern China were at RMB 3,970-4,010/MT, down RMB 280-290/MT from RMB 4,250-4,300/MT reported last. Rebar export offers assessed at USD 530-555/MT, FoB China. It is expected that may fall further amid urgent destocking activities by participants in order to cut losses on bearish outlook.

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.