Posted on 22 Apr 2022
Shagang, China's largest privately-owned steel producer and headquartered in East China's Jiangsu province, announced on Thursday it is rolling over its list prices of rebar, wire rod and bar-in-coil for sales over April 21-30 from the previous ten days. Market sources said at the moment, Chinese mills such as Shagang are being pressured by high costs on the one hand and slack demand amid the COVID-19 emergency on the other, leading Shagang to opt to mark time.
With the latest pricing policy, the steel giant is still offering its HRB400 16-25mm priced at Yuan 5,350/tonne ($839.9/t), its HPB300 6-10mm wire rod at Yuan 5,310/t and HRB400 8-10mm bar-in-coil at Yuan 5,400/t, all in terms of EXW and including the 13% VAT.
"Steel sales have not been good recently. Domestic demand has been seriously impeded by the (COVID-19) pandemic," a steel trader based in Jiangsu explained.
Jiangsu, bordering Shanghai, the epicenter of the ongoing fight against the virus, has implemented restrictions in various forms such as controls on transportation and limits on visitor traffic at public places to curb the virus spread, Mysteel Global noted.
"Though work on construction projects in Jiangsu has not been ordered stopped (unlike in Shanghai), the restrictions have greatly slowed the transportation of building materials and steel, which is affecting the rate of construction progress," he observed.
In Jiangsu for now, the pandemic is not so serious, with fewer than ten confirmed cases being reported daily. Yet like in Jiangsu, authorities in many other cities and provinces across in China, with or without infections, are also taking precautionary measures against outbreaks occurring or worsening that are also impacting the steel market.
"The whole supply chain is being hit by disruptions to logistics, with transportation of both steelmaking raw materials and finished steel being interrupted," a market watcher based in East China's Anhui province also observed.
The difficulties that steel mills face in securing raw materials are also pushing up their costs of raw materials procurement and production, making them unwilling to cut their finished steel prices too, he noted.
Even though the high production costs they're enduring now are forcing some mills to operate at a loss, "the steelmakers generally intend to maintain production – reasoning that suspending production will result in even deeper losses than now – and it's this policy that is keeping demand for raw materials firm and driving prices up further," an official from a steel mill in East China indicated.
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
