China's Shagang Steel hikes scrap purchase price on declining stocks

Chinese domestic scrap prices have strengthened after Golden week holidays on declining stocks, Eastern China's largest EAF steel maker - Shagang group has announced a price hike for its domestic scrap purchases by RMB 80/t ($12) for all grades, effective from today (10th Oct'20).

The purchase price of HMS (6-10 mm) thickness has declined to RMB 2,720/t ($406), inclusive of 13% VAT delivering to headquarters works at Zhangjiagang North of Shanghai in China. While the price of other grades, including HMS (10-20 mm) thickness stands at RMB 2,750/t ($411) and HMS (not less than or equal to 20 mm) thickness stands at RMB 2,780/t ($ 415).

Notably, Shagang has raised scrap purchase price after four successive price cuts observed in Sep'20 by a total of RMB 160/t ($ 24) since mid-Sept'20.

Steel futures up after Chinese holidays -SHFE rebar futures for Jan'21 contract surged by RMB 73 ($11) yesterday and closed at RMB 3,633/t. The billet prices in the Tangshan market (northeast China) opened with a sharp rise of RMB 70 ($10) after the Golden week holidays. The price of commonly traded Q235 billet 150mm diameter was reported at RMB 3,370/t ($503/t) in Tangshan, inclusive of 13 % VAT.

Also, spot iron ore prices inched higher by $2.7 on improved buying interest as Chinese buyers returned to the spot market following the end of Golden Week holidays. The price for Fe 62% fines was assessed at $125.85/t CFR China. Market sources saw a surge in iron ore demand in response to more bullish sentiment for steel prices and port-side reselling opportunities.