China: Shagang hikes HRC list price by $37/t for Feb sales

Shagang Group (Shagang), China's leading privately-owned steel producer headquartered in East China's Jiangsu, is lifting domestic list prices of its hot rolled coils by Yuan 250/tonne ($37.2/t) for February sales, the mill announced to dealers on February 1. The rise is the steel giant's second upward adjustment for these flat products in two months after it added Yuan 200/t in January, Mysteel Global notes.

Shagang's HRC list prices, which the steel giant releases every month, are viewed as a bellwether of flat steel market sentiment, Mysteel Global notes. Shagang is the only major Chinese steel producer to publicly announce such prices on a regular basis. Competing mills such as Baosteel only reveal price-change increments.

This month's Yuan 250/t adjustment lifts the list price of Shagang's Q235 5.5mm HRC to Yuan 4,500/t for February sales and that for its SPHC 4.0mm HRC to Yuan 4,510/t, according to its statement. The prices listed above are including the 13% VAT, Mysteel Global notes.

Shagang, which hosts several blast furnaces as well as electric furnaces at its Zhangjiagang works, seems to be tracking strengthening spot price trends for hot coils. Mysteel's latest survey assessed China's national price of Q235 4.75mm HRC at Yuan 4,247/t including the 13% VAT as of February 1, or up by Yuan 99/t from January 3.

The mill's decision to lift the list prices was mainly to reflect the higher production costs it is incurring, a Shanghai-based analyst said.

As of February 1, Mysteel's SEASEX 62% Australian Fines had reached $127.3/dmt CFR Qingdao, up by $9.95/dmt from January 3.

Besides, demand for flat-rolled products from China's infrastructure and manufacturing sectors is seen growing in the near term, another Shanghai-based analyst commented, mainly supported by stimulus policies from the central government. Also, HRC stocks at hand are generally low, she said.

Written by Villanelle Xia, xiayi@mysteel.com

Edited by Zhenqi Yang, yangzhenqi@mysteel.com

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