Posted on 24 Jun 2022
The almost daily reductions which China's leading electric-arc-furnace (EAF) steelmaker, Shagang Group (Shagang), is making to its scrap buying prices continue. On Thursday morning, the mill has just announced its eighth cut since June 14, clipping its scrap procurement prices by another Yuan 100/tonne ($14.9/t) for deliveries of all grades, citing the recent slump in Chinese steel prices.
The mill, headquartered in East China's Jiangsu province, has reduced its buying prices by a total of Yuan 420/t since June 14, and is now paying Yuan 3,400-3,460/t for domestically-sourced HMS grade scrap including delivery and the 13% VAT, Mysteel Global noted from its pricing policy releases.
As usual, Shagang's scrap price caused spot scrap prices in Zhangjiagang where its main works are located, to lose more ground in an instant, with the local price of the 6-8mm common-grade carbon steel scrap slipping by Yuan 60/t on day to reach Yuan 2,840/t by Thursday morning, or a new low since December 3 2021, Mysteel's data showed.
China's domestic steel prices have been on the downtrend since mid-June in response to bearish market sentiment amid slack downstream demand. As of June 22, China's national price for HRB400 20mm dia rebar under Mysteel's assessment fell Yuan 381/t on week to Yuan 4,303/t and including the VAT, or a new low since December 21 2020.
Accordingly, Shagang slashed its list prices of major long steel products by Yuan 200-300/t for sales over June 21-30, as reported.
At the same time, scrap arrivals to Shagang's works remained plentiful, Mysteel Global noted. On June 22, scrap deliveries to the mill's Zhangjiagang plant totaled 20,999 tonnes/day, up 21.4% on week, according to Mysteel's tracking.
"Apparently, there is still room for Chinese scrap prices to decline further. So domestic scrap traders have taken a fast-in and fast-out stance to avoid losses," a Shanghai-based market watcher commented, observing that there had been a long queue of trucks loaded with steel scrap outside the plants of some steel mills, waiting to be offloaded.
Source:Mysteel Global
