Taiwan Feng Hsin hikes scrap buying prices by $6.6/t

Feng Hsin Steel, Taiwan's largest rebar producer headquartered in Taichung in central Taiwan, has decided to raise its buying prices for local scrap by TWD 200/tonne ($6.6/t) from two weeks earlier for business negotiations over April 10-14, a company official confirmed on Tuesday. The mini-mill is rolling over its rebar list prices during the same period, however.

With the latest adjustment, Feng Hsin is paying TWD 12,100/t for local HMS 1&2 80:20 scrap, while its list price for 13mm dia rebar stays unchanged over the prior two weeks at TWD 21,000/t, according to the official.

The mini-mill had cancelled its weekly pricing meeting last week due to public holidays in Taiwan over April 3-5 for Children's Day and the Qingming Festival, Mysteel Global noted.

Feng Hsin's price hike for local scrap procurement was mainly aimed at encouraging deliveries, the company official explained. "Considering the decline in the volume of ferrous scrap arising, local scrap traders are refraining from undertaking deliveries to mini-mills if the procurement price is below their expectations."

This is despite the fact that global scrap prices delivered to Taiwan had weakened steadily last week, local data show.

As of April 10, the price of US-sourced HMS 1&2 80:20 material had slipped to a three-month low of $390/t CFR Taiwan, lower by $25/t from two weeks before, while the price of Japan-origin H2 scrap posted a sharper fall of $30/t during the same period to reach $405/t CFR Taiwan, according to a local market source.

The mini-mill has decided to roll over its rebar list prices this week, as its production costs have increased with the higher scrap buying prices, while rebar demand from end-users is not so strong, Mysteel Global learned.

Scrap prices in mainland China also softened last week with the weakness in finished steel prices and the shrinking profit margins of local steel producers.

As of April 10, China's steel scrap index under Mysteel's assessment was at Yuan 3,189.3/tonne ($463/t) on delivery and including the 13% VAT, lower by Yuan 4.8/t from the prior week. In parallel, the national price of HRB400E 20mm dia rebar was assessed by Mysteel at Yuan 4,153/t including the 13% VAT, down Yuan 103/t on week.

With the fall in steel prices and the lukewarm demand, Shagang Group, China's leading electric-arc-furnace steelmaker headquartered in Zhangjiagang city in East China's Jiangsu, lowered its scrap procurement price by Yuan 50/t for all grades effective from April 11, as Mysteel Global reported.

Written by Nancy Zheng, zhengmm@mysteel.com

This article has been published under an article exchange agreement between Mysteel Global and SteelMint.