One of the largest ferrous scrap consumers in east China, Shagang Jiangsu Steel group has raised its domestic scrap purchase price today by Chinese Yuan (RMB) 80/MT (USD 12). After witnessing no revision in prices for almost two months, the company has raised its prices amid improving demand for finish steel in spot as well as export market.
As per latest reports, Shagang is now paying RMB 2,340/MT (USD 343) inclusive of 17% VAT for HMS (6-10 mm in thickness) delivered to its headquarter works situated in Zhangjiagang province in China, against last assessment of RMB 2,260/MT.
In line with this, Shagang has also raised purchase prices for other grades of scrap by RMB 80/MT in the latest price revision. Shagang is now paying RMB 2420/MT (USD 355) for HMS 1 (thickness not less than 20 mm), RMB 2440/MT (USD 358) for prime charging scrap and RMB 2380/MT for HMS 2 (6-10 mm). While new prices stood at RMB 2240/MT and RMB 2110/MT for melting scrap with specification 4-6 mm and 2-4 mm thickness respectively inclusive of 17% VAT.
Notably Shagang has revised prices after gap of 2 months as last price revision was seen in end of May. It had raised prices first time in last three months’ period for local scrap. In May`18, Shagang had witnessed five successive price cuts through which prices moved down by RMB 140/MT from peak RMB 2400/MT to RMB 2260/MT on 30th May`18.
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. In 2017 Shagang Steel’s domestic ferrous scrap purchases recorded at 5.72 MnT as against 2.43 MnT in 2016, while company forecasts its annual scrap purchases likely to exceed 7 MnT in 2018.
Following Shagang price hike other major steelmakers in eastern China are also expected to rise prices in upcoming days.
Chinese Yuan depreciated by 7% in last two months’ time - USD/CNY rate today stands at 6.83 as against 6.41 two months earlier. Sharp devaluation of currency had resulted in limited trading activities in China in last two months.
Province-wise domestic scrap reference prices as on 30th Jul’18 –
| Domestic scrap HMS (6-10 mm), Prices in RMB/MT including 17% VAT |
| Province | Origin | Price |
| Shandong | Jinan | 2420 |
| Jiangsu | Zhangjiagang | 2340 |
| Fujian | Fuzhou | 2440 |
| Anhui | Maanshan | 2320 |
| Zhejiang | Taizhou | 2350 |
| Guangdong | Guangzhou | 2390 |
| Tianjin | Tianjin | 2560 |
| Hebei | Handan | 2570 |
Source: SteelMint Research; Exchange Rate: 1 USD = 6.83 RMB
Shagang raises finish long steel prices for late July shipments - The mill is selling its HRB 400 16-25 mm rebar at RMB 4,250/MT (USD 628) over the period July 21-31st, up RMB 100/MT from its asking price for products shipped during mid-July.
As for its HPB300 wire rod, the mill has kept prices at RMB 4,430/MT over the same period, up RMB 50/MT from prices in mid-June. Both prices are on an ex-works basis, including VAT. It is now expected that the higher finish long prices would lead to a bullish sentiment in the spot market in China.
