China: Shagang lifts scrap purchase prices by $11/t

China's largest electric arc furnace (EAF) steelmaker, the Jiangsu Shagang Group, lifted its scrap buying prices on 30 December 2022. This is its fifth consecutive revision in December. Overall, this month, prices are up by RMB 160/t ($23/t) including this raise.

The steelmaker, on 30 December, reduced prices by RMB 80/t ($11/t) for all grades against the last revision. After the latest revision, HMS (6-10 mm) prices are now at RMB 3,120/t ($447/t) delivered to headquarters, including 13% VAT, effective from 30 December. The company increased prices to attract sellers for more deliveries.

Market highlights

• Imported scrap prices up w-o-w: Prices of US-origin HMS and shredded scrap stood at $399/t and $419/t, respectively, up by $8/t w-o-w, CFR China.
  
  
• Local billets prices increase w-o-w: Domestic billets prices in China's Tangshan increased by RMB 50/t ($7/t) w-o-w to RMB 3,780/t ($548/t), inclusive of 13% VAT on 30 December.
  
  
• Rebar futures up d-o-d: China's SHFE rebar futures contract for May 2023 delivery closed today at RMB 4,105/t ($595/t), an increase of RMB 57/t ($8/t) d-o-d.
  
  
• Iron ore spot prices up d-o-d: The Fe 62% iron ore index was at $117.35/DMT CFR North China on 30 December, slightly up $1.8/t from the last closing. Iron ore prices were likely to rise in the short-term as construction demand in China may increase around March 2023, promoting the usage of greater Fe content medium-grade fines.
  
  

Outlook
Due to possible low demand and sales during China's Lunar New Year holidays, scrap purchase prices may remain flexible at these levels for some time.