Shagang cuts scrap purchase price by another $7/t
This is the company's sixth clip in ferrous scrap buying prices in March, taking its total price reduction to Yuan 300/t so far this month, Mysteel Global noted.
With the latest adjustment, Shagang is paying scrap dealers Yuan 2,760-2,810/t for domestically processed HMS grade scrap, including delivery to its plants and the 13% VAT, according to its announcement.
Sentiment in China's ferrous market brightened just temporarily last week before it dimmed again amid the retracement of steel demand among end-users, market sources observed. The feeble demand caused domestic prices of finished steel products to drop rapidly in the recent few days, Mysteel's survey showed.
For example, Mysteel's assessment of the national spot price for the HRB400E 20mm diameter rebar lost 2.2% on week to reach Yuan 3,653/t including the 13% VAT on March 27, the lowest level since May 7 2020.
By the same day, the 35 independent EAF steelmakers under Mysteel's other survey suffered an average loss of Yuan 135/t on their sales of construction steel products, deepening by Yuan 52/t from a week ago.
As a result, domestic EAF mills hurried to reduce scrap purchase prices so that they could shave their production costs, Mysteel Global noted.
Shagang's price reduction placed immediate pressure on spot steel scrap prices in East China, leading the transaction price of 6-8 mm carbon steel scrap in Jiangsu's Zhangjiagang city to lose Yuan 20/t on day to reach Yuan 2,500/t excluding the 13% VAT by Thursday morning, as Mysteel assessed.
By Thursday morning, another 85 steelmakers across the country also announced scrap price cuts in the range of Yuan 10-80/t, Mysteel Global learned.
Written by Anthea Shi, shihui@mysteel.com
Edited by Alyssa Ren, rentingting@mysteel.com
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