Posted on 02 Aug 2022
Shagang Group (Shagang), China's leading electric-arc-furnace (EAF) steelmaker, has decided to raise its steel scrap prices by Yuan 100/tonne ($14.8/t) effective August 1 the first time after the aggressive 13 rounds of price cuts by a total of Yuan 1,150/t since June 14, mainly on noting the recovery in Chinese finished steel prices and relatively low scrap deliveries.
With the latest adjustment, Shagang, headquartered in Zhangjiagang, East China's Jiangsu, is paying Yuan 2,770-2,830/t for the domestically-produced HMS grade scrap including the delivery to its steelworks and the 13% VAT, according to the company release.
"Shagang's decision is within market expectation, as Chinese steel prices have shown signs of recovery, and scrap deliveries to Shagang have dropped notably," a Shanghai-based market watcher commented. "And some other mills had already raised their scrap buying prices prior to Shagang's increment," he added.
By July 29, the national price of HRB400E 20mm dia rebar under Mysteel's assessment increased by Yuan 143/t on week to Yuan 4,187/t and including the 13% VAT.
As of July 31, scrap deliveries to Shagang's Zhangjiagang steelworks averaged at a relatively low level of only 601.5 tonnes/day, down 36.7% on day or 88.7% on week, Mysteel's survey showed.
"We've suffered too much after domestic steelmakers' frequent and aggressive price cuts, so the Yuan 100/t price increment could not make up our losses," a scrap trader in Jiangsu told Mysteel Global, adding that he will slow down selling and wait for scrap prices to rise further.
In immediate response to Shagang's latest price adjustment, China's spot transaction price of 6-8mm common-grade carbon steel scrap in Zhangjiagang rose Yuan 50/t from last Friday to Yuan 2,410/t excluding the 13% VAT as of Monday morning, Mysteel's tracking showed.
Source:Mysteel Global
