China's Shagang group lowers scrap purchase price

Eastern China's largest EAF steelmaker- Shagang group has cut its scrap purchase price by RMB 30/t ($4) for all grades effective from today (19th Oct'20).

The purchase price for HMS (6-10 mm) now stands at RMB 2,690/t ($401), inclusive of 13% VAT, delivered to headquarters works at Zhangjiagang North of Shanghai in China. While other grades including HMS (10-20 mm) thickness stands at RMB 2,720/t ($405) and HMS (not less than or equal to 20 mm) thickness stands at RMB 2,750/t ($410).

Factors behind price cut -

• Chinese spot iron ore fines (Fe 62%) price opened at $123.85/ t last week and dropped to $119.05/t towards the weekend amid softening demand and increasing port stocks
  
  
• World's top iron ore miner, Vale is likely to observe an increase of over 25% in iron ore production in Q3 to around 85 mn t
  
  
• The winter season in China is expected to lower steel mills' utilization and thus lower scrap purchases
  
  
• The SHFE rebar futures Jan'21 contract opened at RMB 3,633/t, after the Chinese Golden Week holidays. Futures fell and stood at RMB 3,611/t today. Decline in steel futures have slightly weakened the market sentiments
  
  
• In the Q3 CY'20 quarter, China's GDP was also up 4.9% on year and up 2.7% on quarter. However as per reports, its lower than the previous estimated numbers