Shagang pares list prices for longs by $14/t for mid-March sales
The price cut means that Shagang's HRB400 16-22 mm rebar is now priced at Yuan 4,020/t, while the prices of its HPB300 6-10mm high-speed wire rod and HRB400 8-10mm bar-in-coil have been clipped to Yuan 4,170/t and Yuan 4,160/t respectively, all in terms of EXW and including the 13% VAT.
Shagang releases its list prices for long steel items three times a month and its price decision is taken as an indicator of market dynamics for long steel products, Mysteel Global notes.
A Shanghai-based source said Shagang's decision to cut list prices reflected the bearish mood prevailing in the market and the slow improvement in long steel demand from building contractors.
"Work on construction sites in many parts of the country has been slow to restart after the Chinese New Year holiday, and tight cashflow issues have also constrained the steel purchases of some end-users," he said.
Mysteel's survey of spot steel sales among the 237 trading houses it monitors across China regularly showed that their trading volume of rebar, wire rod and bar-in-coil averaged just 98,662 tonne/day during early March, far below the threshold of 200,000 t/d in the traditional peak season for steel consumption over March-April. The early March average was also significantly lower by some 46.2% from the same period last year.
The spot price of HRB400E 20mm rebar in Shanghai – a major market for the Shagang brand rebar – has steadily declined so far this month. Mysteel's assessment showed that this price had lost some Yuan 110/t from the end of February to reach Yuan 3,690/t including the 13% VAT as of March 8.
Moreover, the sluggish market sentiment saw the price of the most-traded May rebar contract on the Shanghai Futures Exchange dive by 2.4% or Yuan 89/t from last Friday's settlement price to land at Yuan 3,606/t when the daytime trading session ended on Monday.
Written by Rong Zhang, zhangronga@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com
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