Shagang’s scrap buying prices up by another $15/t
Shagang Group (Shagang), China’s largest electric-arc-furnace (EAF) steelmaker headquartered in Zhangjiagang city in East China’s Jiangsu province, has decided to lift its steel scrap procurement prices by Yuan 100/tonne ($14.8/t), the steelmaker said in an announcement on August 2.
With the latest adjustment, effective Thursday the company is paying Yuan 2,520/t for HMS grade scrap in terms of delivery to the plant and including the 16% VAT.
Prior to Thursday’s announcement, Shagang had already raised its scrap buying prices by Yuan 60-80/t with effect from July 28, as Mysteel reported. “We all believed that Shagang’s notification of its price rise on July 28 was far lower than seemed appropriate,” one Shanghai-based scrap analyst said. “So raising its buying price again just five days later is probably what Shagang expected it might have to do.” Scrap arrivals at its works clearly didn’t pick up as quickly as Shagang had hoped when it tweaked buying prices earlier, Mysteel notes.
In the spot market, the comprehensive transaction price for 6-8mm common-grade carbon steel scrap in Zhangjiagang jumped by Yuan 50/t on day on August 2 to Yuan 2,350/t excluding 16% VAT. Meanwhile, Mysteel’s scrap price index has also continued to rise, climbing by Yuan 6.1/t or 0.27% on week to Yuan 2,262.5/t on delivery including 16% VAT on the first working day of August.
“There is still room for a Yuan 200/t or more rise to bring Zhangjiagang prices into line with overall market prices,” one scrap steel trader in Jiangsu told Mysteel. “Also, Shagang is looking to secure high-quality scrap by lifting its buying prices again in such a short period. Market supply is now tight given the scorching temperatures after the end of the rainy season.”
As of August 1, Shagang decided to raise domestic rebar list prices by another Yuan 100/t for sales during August 1-10, taking its price for normal spec rebar to Yuan 4,350/t including the 16% VAT, as Mysteel reported, mainly because of the low level of market stocks and strong demand in spot steel market.
Mysteel’s national average price of HRB 400 20mm dia rebar had been strengthening for ten straight days as of August 1, staying high at Yuan 4,354/t including 16% VAT. As of July 25, rebar stocks among the 137 construction steel producers regularly surveyed by Mysteel declined for a fourth consecutive week to 1.7 million tonnes.
Written by Rebecca Zhu, rebeccazhu@mysteel.net.cn
Edited by Russ McCulloch, russ.mcculloch@mysteel.com
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