China: Shagang Steel to Raise Scrap Purchase Price Amid Tight Availability

Eastern China's largest private ferrous scrap consumer and EAF steelmaker - Shagang Jiangsu Steel group likely to announce the price hike for all grades of domestic steel scrap purchase by RMB 50/MT (USD 7) effective from tomorrow (18th June'19). Notably, this price revision for domestic scrap purchase comes after almost a gap of one month against the previous price cut made on 15th May'19. The specific prices shall be based on the price of 2019-F9.

Chinese steel scrap prices remain supported amid tight availability. The continuing high prices of imported iron ore are leading some blast furnace (BF) steel mills to prefer to increase their use of ferrous scrap in the steelmaking process. The rising demand for scrap from the steelmakers' side could have resulted in a price rebound in the domestic steel market.

With recent price hike, Shagang Steel will pay RMB 2,630/MT (USD 380) inclusive of 13% VAT for HMS (6-10 mm thickness) delivered to headquarter works situated in Zhangjiagang north of Shanghai in China, up RMB 50/MT against the last report of RMB 2,580/MT on 15th May'19.

Following the largest privately owned steel mill's lead, many leading scrap consumers in eastern regions like Maanshan, Handan, Shanghai and Taizhou likely to lift scrap purchase prices by RMB 40-60/MT in China.

Shagang Steel lowered finish long prices for mid-June shipments - Steelmaker had lowered finished steel prices on lower list prices and bearish sentiments in the local steel market. Shagang is selling HRB400 16-25 mm dia rebar at RMB 4,070/MT (USD 588) over the mid-June (11th-20th) period, down RMB 180/MT against the last set of prices for early-Jun'19 shipments. While prices for HPB300 6.5 mm dia wire rod lowered to RMB 4,150/MT (USD 599), down RMB 130/MT as against the last set. All prices are on an ex-works basis, including VAT.