Shagang cuts scrap buying prices 4th time by $4.3-7.1/t
Shagang, headquartered in Zhangjiagang city, East China’s Jiangsu province, has trimmed its scrap procurement prices by a total of Yuan 120-140/t, and after the latest adjustment, the steel mill is paying Yuan 2,560/t for domestically sourced HMS 80:20 scrap including the delivery to the mill and the 13% VAT.
“China’s domestic steel prices have been weakening and have severely squeezed steelmakers’ steel margins, and the mills, amid the already thin margins, have had to pass on the burden to raw material suppliers,” a Shanghai-based steel analyst said.
As of March 26, Mysteel’s national average price for HRB400 20 mm dia rebar decreased to Yuan 3,647/t including the VAT, down another Yuan 25/t on week, according to Mysteel’s data.
Shagang’s scrap price cut has been immediately reflected in the spot scrap price in Zhangjiagang with its local price for the 6-8mm common-grade carbon steel scrap down Yuan 30/t from last Friday to Yuan 2,230/t excluding the 13% VAT as of March 30.
Besides, Shagang’s latest scrap price cut has triggered another 35 steelmakers in China to lower their scrap buying prices by a range of Yuan 10-60/t, according to Mysteel’s survey.
Amid the overall steel marked dismal and domestic scrap price declines led by Shagang’ consistent scrap price cuts, “steel scrap traders couldn’t no longer ignore the growing market bearishness any longer, and they have, therefore, rushed to deliver and sell,” the Shanghai analyst said.
Domestically-produced steel scrap deliveries to Shagang’s Zhangjiagang steelworks, for example, have been on a consistent rise since March 20, up 2.4% on day or 68.6% on week to 25,811 tonnes/day as of March 27, a Jiangsu-based market watcher observed.
It seems that China’s steel scrap prices, though, already at a comparatively low level, may continue to decline in the near term, according to the Shanghai analyst.
Written by Lindsey Liu, liulingxian@mysteel.com
Edited by Hongmei Li, li.hongmei@mysteel.com
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