Shagang raises ferrous scrap purchase price by $7/t
The announcement is significant as it represents the first time so far this year that the company has raised its scrap purchase prices, after having cut these on no fewer than nine occasions during the January-March quarter, Mysteel Global noted.
With the latest adjustment, Shagang is paying scrap dealers Yuan 2,700-2,760/t for domestically processed HMS grade scrap, including delivery to its plants and the 13% VAT, according to its announcement.
Shagang announced its price lift to encourage domestic scrap suppliers to increase their deliveries, as the company had seen its scrap inventories drop rapidly, sources say.
"The plunge in the steel scrap prices late last month prompted most dealers to slow down or halt their scrap collection and sales recently, leading to tight availability of steel scrap in the market," a market watcher based in Shanghai said.
On April 11, the volume of steel scrap arriving at Shagang's Zhangjiagang works in Jiangsu totalled just 4,310 tonnes, falling by a large 63.2% on week and hitting a nine-month low, according to Mysteel's tracking.
As of the same day, the company's total scrap inventories had also dropped by 17.3% on week to touch a more than five-month low of 406,984 tonnes, the survey showed.
Shagang's price adjustment gave a boost to spot prices in Jiangsu, with the transaction price of 6-8 mm carbon steel scrap in Zhangjiagang city climbing to Yuan 2,500/t excluding the 13% VAT as of Friday morning, higher by Yuan 20/t from the previous day, according to Mysteel's assessment.
Also on Friday morning, another 17 steelmakers across the country announced similar price hikes for steel scrap in the range of Yuan 10-50/t, Mysteel Global learned.
Written by Anthea Shi, shihui@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com
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