Shagang cuts steel scrap buying prices by another $15/t
With Wednesday's cut, Shagang has reduced its scrap procurement prices by a total of Yuan 200/t so far this month, and now is paying Yuan 3,820-3,880/t for the domestically-sourced HMS grade scrap in terms of delivery to the mill and including the 13% VAT.
As expected, Shagang's scrap price announcement quickly impacted spot scrap prices in East China's Zhangjiagang where Shagang is headquartered, with the local price of the 6-8mm common-grade carbon steel scrap falling by Yuan 30/t on day to Yuan 3,260 /t and excluding the 13% VAT as of Wednesday morning.
"The frequent declines in steel scrap buying prices had to do with the continuous drop in prices of finished steel since the beginning of this month," a Shanghai-based market watcher commented.
As of May 24, China's national average benchmark price for HRB400E 20mm dia rebar had decreased by another Yuan 41/t on day or Yuan 116/t on week to reach Yuan 4,798/t and including the 13% VAT, according to Mysteel's database.
Meanwhile, steel scrap arrivals at Shagang's works are still hovering at rather high levels, Mysteel Global noted. On May 24, scrap deliveries to the Zhangjiagang plant totalled 17,901 tonnes/day, up 4.7% on day or 7.8% on week.
Other than weakening finished steel prices, the frequent coke price cuts by Chinese steel mills have also placed pressure on scrap prices, as the former would lower production costs of hot metal and thus dampen the price competitiveness of scrap, Mysteel Global understands.
Chinese steelmakers had successfully won three rounds of cuts totalling Yuan 600/t in their procurement prices for merchant coke this month, as Mysteel Global reported.
Written by Lindsey Liu, liulingxian@mysteel.com
Edited by Zhenqi Yang, yangzhenqi@mysteel.com
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