Shagang clips scrap prices 7 times in March
This marked the company's seventh cut in scrap prices last month, taking its total price reduction to Yuan 350/t in March, Mysteel Global noted.
Shagang's scrap price adjustments in March (Yuan/t)
Date | Price adjustment | Total |
2024/3/30 | ↓50 | ↓350 |
2024/3/28 | ↓50 | |
2024/3/16 | ↓50 | |
2024/3/15 | ↓50 | |
2024/3/12 | ↓70 | |
2024/3/9 | ↓30 | |
2024/3/6 | ↓50 |
After the latest adjustment, Shagang is paying scrap dealers Yuan 2,710-2,760/t for domestically processed HMS grade scrap, including delivery to its plants and the 13% VAT, according to its announcement.
By cutting the scrap purchase prices, the company attempted to press its scrap suppliers to slow their deliveries, Mysteel Global noted. On March 28, the volume of steel scrap arriving at Shagang's Zhangjiagang works in Jiangsu had increased for the third straight day to reach 19,000 tonnes, higher by 27.5% on week, according to Mysteel's daily tracking.
The slower drops in the prices of steel scrap against the steep falls in finished steel prices saw the negative margins worsen for mini-mills, as reported. This dampened Shagang's enthusiasm for steel production, prompting the steelmaker to keep its feed inventories at a low level, Mysteel Global learned.
By March 29, total scrap stocks held by Shagang's Zhangjiagang plants had fallen by 3% on week to 482,223 tonnes, Mysteel's survey showed. On the same day, the average loss on the sales of construction steel products incurred by the 35 independent steel mills Mysteel tracks expanded to Yuan 119/t, larger by Yuan 36/t on week.
Following Shagang's price reduction, the transaction price of 6-8 mm carbon steel scrap in Zhangjiagang weakened on Monday morning, losing Yuan 30/t from last Friday to reach Yuan 2,470/t excluding the 13% VAT, according to Mysteel's assessment.
During the weekend, another 68 steelmakers across the country announced similar price cuts for steel scrap in the rage of Yuan 10-100/t, Mysteel Global learned.
Written by Anthea Shi, shihui@mysteel.com
Edited by Alyssa Ren, rentingting@mysteel.com
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