China: Shagang cuts longs list prices by $14/t for mid-Aug sales

Shagang Group (Shagang), China's leading privately-owned steel producer, is cutting Yuan 100/tonne ($13.8/t) off the list prices of its major long steel products for sales over August 11-20, after having lifted the prices by Yuan 50-100/t in the previous sales period, the East China's Jiangsu-headquartered company announced on Friday.

With the latest pricing policy, Shagang's HRB400 16-22mm rebar is now priced at Yuan 3,870/t, its HPB300 6-10mm high-speed wire rod is listed at Yuan 3,960/t, and its HRB400 8-10mm bar-in-coil at Yuan 4,050/t, all in terms of EXW and including the 13% VAT.

The price cuts were in sync with the downward trend seen in Chinese steel prices recently. For example, the spot price of HRB400E 20mm rebar in Shanghai, a major market for Shagang's long steel products, was assessed by Mysteel at Yuan 3,700/t including the 13% VAT as of August 10, slumping by Yuan 90/t from that on July 31.

Meanwhile, Shagang's chopping of steel list prices followed the cuts it made on its ferrous scrap buying prices recently, Mysteel Global notes. The steel giant - also the country's largest electric-arc-furnace steel producer - had slashed its scrap procurement prices by a total of Yuan 60/t so far this month, and it is now paying Yuan 2,920-2,980/t for domestically-sourced HMS grade scrap including delivery and the 13% VAT.

Shagang's ten-day pricing policy cycle is usually regarded as a barometer of the domestic market sentiment for long steel products, Mysteel Global notes.

"At present, market sentiment is rather dismal, and long steel demand from end-users stays sluggish," a market source fretted.

This was echoed by Mysteel's survey results on the spot sales of construction steel including rebar, wire rod and bar-in-coil among 237 Chinese steel traders, which showed that their daily trading volume averaged 132,034 tonnes/day during early August, falling by some 11.5% or 17,230 t/d from the prior 11 day's average.

Written by Rong Zhang, zhangronga@mysteel.com
Edited by Alyssa Ren, rentingting@mysteel.com

Note: This article has been written in accordance with an article exchange agreement between Mysteel Global and SteelMint.