Shagang raises domestic long steel prices – again
Shagang Group, China's largest privately-owned steelmaker, has raised all its long steel prices again, the company announced on Tuesday, adding another Yuan 150/tonne ($22/t) to its base-size rebar prices for sales during August 21-31. The rise is the Jiangsu-based steel giant’s fourth in succession, Mysteel notes, but some traders have begun to flinch at the mill’s spree of price increases.
“The present high prices are beginning to be a challenge for traders,” grumbled a Shanghai-based trader who is also a Shagang agent. “This has dampened our enthusiasm to continue restocking from Shagang. Their deliveries are slowing (and so) we would rather procure rebars from other mills which can provide products faster and at a cheaper price!”
The trader also pointed out the high prices being demanded by companies such as Shagang were beginning to affect the hitherto robust growth of the futures market. “The rebar futures price showed some weakness in this morning’s session (on the Shanghai Futures Exchange) which suggests that the current physical price bubble for rebar will burst sooner or later,” he added.
The most-traded rebar contract in SHFE – that for delivery in January 2019 – closed at Yuan 4,369/t in the morning session Tuesday, down by Yuan 27/t from the closing price on Monday.
Another Nanjing-based Shagang agent expressed a similar opinion regarding Shagang’s high prices, saying these lacked a base for further increases. “We have no appetite to buy and are in no hurry to replenish stocks given these high prices, especially when end-user demand isn’t as robust now as it was. We are more willing to wait for prices to drop – and I believe that day will come soon,” he told Mysteel.
After the latest adjustment, Shagang’s list price for HRB400 16-25mm dia rebar climbs by Yuan 150/t from the mill’s late August price level to Yuan 4,600/t. However, Shagang is charging the same premiums for other diameter rebars as it did for August 11-20 sales, namely a Yuan 160/t surcharge for 10mm dia, Yuan 100/t for 12mm dia, Yuan 30/t for 14mm dia, Yuan 60/t for 28-32mm dia, and Yuan 250/t for both 36mm dia and 40mm dia, Mysteel understands.
For sales over August 21-31, Shagang’s anti-seismic rebar still commands a Yuan 30/t premium, while its HRB500 14-25mm dia rebar an extra Yuan 450/t on top of the price for HRB400. The mill’s prices for high-speed wire rod and bar-in-coil for late-August sales increase is up Yuan 100/t from August 11-20, with the price for HPB300 6.5mm dia wire rod climbing to Yuan 4,680/t, Mysteel understands. That for HRB400 8-10mm dia bar-in-coil is Yuan 100/t higher at Yuan 4,750/t, with the Yuan 300/t premium for HRB400 6mm.
Written by Venus Wang, wangyi@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@Mysteel.com
Shagang’s long steel list prices for August 21-31 sales:
Spec |
Diameter (mm) |
August 21-31 |
August 11-20 |
Change |
|
Rebar |
HRB400 |
16-25 |
4,600 |
4,450 |
150 |
Coiled rebar |
HRB400 |
8-10 |
4,750 |
4,650 |
100 |
High-speed wire rod |
HPB300 |
6.5 |
4,680 |
4,580 |
100 |
Note: All of the listed prices are EXW and including the 16% VAT.
*All of the prices are immediately effective starting August 21, 2018.
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