Shagang lifts ferrous scrap purchase prices by $11/t
It marked the company's second increase in its ferrous scrap purchase prices so far this month as an effort to attract more scrap deliveries from the suppliers, Mysteel Global noted.
After the latest adjustment, Shagang is paying scrap dealers Yuan 2,780-2,840/t for domestically processed HMS grade scrap, including delivery to its plants and the 13% VAT, according to its announcement.
Shagang has seen its steel scrap inventories at a six-month low as domestic scrapyards and dealers slowed or suspended their sales recently, Mysteel's survey showed, with the steelmaker's total scrap stocks standing at 293,552 tonnes by April 22, down by a significant 41% from end-March after falling continuously during the past three weeks.
The company's earlier attempt on April 12 to stimulate scrap deliveries by raising the buying prices proved little effective, Mysteel Global noted.
On April 22, the total volume of steel scrap arriving at Shagang's Zhangjiagang works in Jiangsu hit a 10-month low of 3,238 tonnes, according to Mysteel's tracking.
"Scrap dealers are dissatisfied with the previous mild increase in scrap prices, and they are expecting steelmakers to offer larger hikes in their quotations," a market watcher based in Shanghai observed.
Shagang's latest announcement for further price rise also buoyed spot scrap prices in Jiangsu, with the transaction price of 6-8 mm carbon steel scrap in Zhangjiagang city rising to Yuan 2,550/t excluding the 13% VAT as of Tuesday morning, higher by Yuan 40/t from the previous day.
The company's move also prompted domestic steelmakers to follow suit. On Tuesday morning, another 27 steel mills across the country announced similar price hikes for steel scrap in the range of Yuan 10-80/t, Mysteel Global learned.
Written by Anthea Shi, shihui@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com
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