China: Shagang slashes longs list prices by $14/t for mid-Jan sales

• Downtrend in domestic steel tags prompts price cut
  
  
• Spot trading volume weakens by 16.4% from late-Dec
  
  

Mysteel: Shagang Group (Shagang), China's leading private steelmaker headquartered in Zhangjiagang in East China's Jiangsu province, has cut its list prices of rebars, wire rods, and bar-in-coils by RMB 100/tonne (t) ($13.6/t) for sales during the middle ten days of January, Mysteel Global learnt.

Shagang's new pricing policy means the company has pared prices of its major long steel products for a second sales period. Consequently, the company's HRB400 16-20 mm rebar is now priced at RMB 3,500/t for 11-20 January sales, while tags of its HPB300 6-10 mm high-speed wire rods and HRB400 8-10 mm bar-in-coils stood at RMB 3,420/t and RMB 3,510/t, respectively, all exw and including 13% VAT.

Shagang, also the country's largest electric-arc-furnace steelmaker, generally releases the pricing policy for its long steel products every ten days, as the frequent announcements allow it to better reflect dynamic changes in market conditions. Its latest price cuts on longs were in response to the downtrend in domestic steel prices lately and weak supply-demand fundamentals as well, Mysteel Global understands.

As of 10 January, spot prices of HRB400E 20 mm rebars in Shanghai - a major market for Shagang's rebars - were lower by RMB 90/t from 31 December at RMB 3,310/t, including 13% VAT, according to Mysteel's assessment.

"At present, both steel production and demand are weak nationwide," a Jiangsu-based source told Mysteel Global.

Mysteel's survey across the 237 Chinese trading houses it monitors nationwide showed that their spot trading volume of rebars, wire rods, and bar-in-coils averaged only 90,175 t/day (d) during early January, lower by 16.4% or 17,638 t/d from the average for late December last year.

In parallel, during 2-8 January, rebar output among the 137 steelmakers Mysteel follows nationwide fell for a third straight week, dipping by 3.2% or 66,000 t w-o-w to a 3.5-month low of 1.99 million tonnes.

On the other hand, Shagang's decision to reduce its longs prices also followed the reductions the mill has made to its scrap procurement prices recently. So far this year, the steel giant has already slashed its ferrous scrap purchase prices four times by a total of RMB 160/t, as reported. The mill is currently paying dealers RMB 2,400-2,460/t for domestically produced HMS grade scrap, including delivery and 13% VAT.

Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.