China: Shagang Steel scrap purchase price increases to nine-month high on low inventories

Eastern China's largest EAF steelmaker- Shagang group- has raised its scrap price for all grades for domestic steel scrap procurement today by RMB 30/t ($4) on continuous declines in scrap deliveries.

The purchase price of HMS (6-10 mm) thickness has climbed up to RMB 2,750/t ($398), inclusive of 13% VAT delivering to headquarters works at Zhangjiagang North of Shanghai in China, in comparison with RMB 2,720/t on 18th Aug '20.

While other grades including HMS (10-20 mm) thickness stands at RMB 2,780/t ($402) and HMS (not less than or equal to 20 mm) thickness stands at RMB 2,810/t ($406).

This is company's 2nd price hike made in a week's time. Notably, the purchase prices are at nine-months high levels.

According to sources, the company was using more of pig iron than scrap in the last one month, however, with an increase in pig iron prices, the company is again looking to increase scrap usage. Also, there is a scrap tightness seen on the supply-side. Scrap inventory with Chinese mills fell 1.35% m-o-m prompting them to procure scrap at increased rates.

Shagang's construction steel prices remain flat for end-Aug - Chinese steelmaker Shagang Steel has kept its ex-mill construction steel prices unchanged for the rest of the month. Rebar HRB400 (16-25mm) is being offered at RMB 3,900/t, wire rod HPB300 (6-10mm) at RMB 4,010/t and coiled rebar HRB400 (8-10mm) at RMB 4,050/t (inclusive of taxes).