China: Shagang Steel Hikes Scrap Purchase Price Further by USD 15

One of the largest ferrous scrap consumers in east China, Shagang Jiangsu Steel group has raised its domestic scrap purchase prices today by Chinese Yuan (RMB) 100/MT (USD 15). After witnessing price hike of RMB 80/MT on 30th Jul’18, the company has raised its prices further amid tightening supply-demand for finish steel in spot as well as export markets.

As per latest reports, Shagang is now paying RMB 2,440/MT (USD 358) inclusive of 17% VAT for HMS (6-10 mm in thickness) delivered to its headquarter works situated in Zhangjiagang province in China, up RMB 100/MT as against last report of RMB 2,340/MT.

In line with this, the steelmaker has also raised purchase prices for other grades of scrap by RMB 100/MT in the latest price revision and paying RMB 2520/MT (USD 370) for HMS 1 (thickness not less than 20 mm), RMB 2540/MT for charging scrap 1 and RMB 2480/MT for HMS 2 (6-10 mm). While new prices stand at RMB 2340/MT and RMB 2210/MT for melting scrap with specification 4-6 mm and 2-4 mm thickness respectively inclusive of 17% VAT.

Shagang had witnessed last price revision after two months of gap on 30th Jul’18 in China however, looking at rising finish steel prices it might have hiked prices again in a week’s time.

Shagang Steel is one of the leading steelmakers in China and with an annual production capacity of 31.9 MnT iron, 39.2 MnT steel and 37.2 MnT rolled products.

Domestic scrap purchase prices increase by upto USD 15 – In last couple of days, many of the leading scrap consuming steelmakers have raised their purchase prices by upto RMB 100/MT in eastern China.

Province-wise domestic scrap reference prices as on 02nd Aug’18 -

Shagang raises finish long steel prices for early August shipments - The mill will sell its HRB 400 16-25 mm rebar at RMB 4,350/MT (USD 638) over the period 01st-10th August, up RMB 100/MT from its asking price for products shipped during late Jul’18.

In line with this, for its HPB300 wire rod, the mill has kept prices at RMB 4,480/MT (USD 657) over the same period, up RMB 50/MT from prices in late July. Both prices are on an ex-works basis, including VAT.

Chinese government pushes restriction on production cut as much as 50% in order to curb emissions further at major steel producing region, Changzhou city in Jiangsu province recently. More than 400 companies will have to enforce compulsory production cuts which has resulted in significant fall in supply and drop in inventories of finish steel and scrap. This situation has lead to increase in domestic steel prices in almost all provinces and successive price hikes by leading steelmakers like Shagang for finish steel amid rising scrap usage in China.