Posted on 06 Apr 2022
Shagang Group, China's largest privately-owned steel producer headquartered in East China's Jiangsu province, is hiking its rebar prices by Yuan 100/tonne ($15.7/t) for domestic sales over April 1-10 but will keep its wire rod and bar-in-coil prices unchanged from the latest pricing term over March 21-31, the mill announced on April 1.
With the latest price adjustment, Shagang's HRB400 16-25mm price climbs to Yuan 5,300/t whilst its HPB300 6-10mm wire rod and HRB400 8-10mm bar-in-coil prices stay unchanged from the past ten days at Yuan 5,310/t and Yuan 5,400/t respectively. All prices are in terms of EXW and including the 13% VAT.
Like many other Chinese steel mills, Shagang is firmly supporting its ex-works prices because the fast rises in raw materials prices are eroding their profits, market sources indicated.
"Steel raw material prices including iron ore, coke and ferrous scrap have all been increasing fast... We have to adjust prices following the overall market trend," an official from a steel producer based in East China's Jiangxi province said.
Besides its huge blast furnace-route capacity, Shagang is also China's leading electric-arc-furnace (EAF) steelmaker. Since early March, the steel giant has been forced to raise its steel scrap procurement prices for four times by a total of Yuan 280/t – its latest rise was also effective from April 1 – due to the tightness of steel scrap supply, as Mysteel Global reported.
Shagang is now paying Yuan 3,970-4,030/t for domestically-sourced HMS 80:20 scrap including delivery and the 13% VAT.
A gap of Yuan 1,200/t between rebar and steel scrap prices is viewed as a "threshold," a steel scrap analyst based in Shanghai maintained. "Falling below this level means the steelmaker will fall into losses," he said, noting that many domestic EAF makers have already started to cut production due to losses.
At the moment, domestic steel demand continues to be negatively affected by the ongoing fight against the Omicron variant in many parts of China. Nevertheless, the steelmakers are not under any great pressure to sell steel at present, which is another reason encouraging them to hold their prices high, a Shanghai-based industry source noted.
"The pandemic broke out in March, just when China's steel demand is supposedly at the seasonal high, so steel mills can still secure some orders despite the virus," he said.
Over the prior ten days over March 21-31, the trading volume of rebar, wire rod and bar-in-coil across 237 steel traders nationwide averaged 160,029 tonnes/day, down 5% from the previous ten days or down 35.3% on year, according to Mysteel's survey.
Shagang's premiums for other long products over April 1-10 | |
Specification | Premium |
HRB400 10mm dia rebar | Yuan 160/t |
HRB400 12mm dia rebar | Yuan 100/t |
HRB400 14mm dia rebar | Yuan 30/t |
HRB400 28-32mm dia rebar | Yuan 60/t |
HRB400 36mm/40mm dia rebar | Yuan 250/t |
HRB500 14-25mm | Yuan 300/t on top of HRB400 base prices |
HRB400 6mm dia bar-in-coil | Yuan 300/t |
Anti-seismic rebar | Yuan 30/t |
Source:Mysteel Global
