Posted on 20 Aug 2021
Shagang Group (Shagang), a leading electric-arc-furnace (EAF) steelmaker, has cut its steel scrap procurement price for the third time in August, clipping another Yuan 50/tonne ($7.7/t) off for all grades of scrap supplies effective August 19, which is probably to respond to recent decrease in the prices of both domestic steel and other raw material prices such as iron ore, according to market sources.
With the latest trimming, Shagang, headquartered in Zhangjiagang, East China’s Jiangsu province, has cut its scrap buying prices by a total of Yuan 150/t since August 6, paying Yuan 3,700 - 3,760/t for HMS grade scrap including the delivery and the 13% VAT starting Thursday.
This has been in line with China’s domestic finished steel price declines, as the domestic steel mills have been passing on some burden to raw material suppliers, a Shanghai-based market watcher commented.
Besides, the close correlation and competition between scrap and iron ore have led to scrap price declines, she added.
As of August 18, Mysteel’s national price of the HRB400E 20mm dia rebar decreased for five straight working days by a total of Yuan 64/t and including the 13% VAT, according to the database, and Shagang also chopped Yuan 200/t off its list rebar prices for sales over August 11-20, as reported.
Over August 11-18, Mysteel SEADEX 62% Australian Fines decreased by $16.65/dmt to $149.75/dmt CFR Qingdao, or a new low since February 2.
Shagang’s latest scrap price cut triggered an immediate spot scrap price drop in Zhangjiagang on August 19, with that of the 6-8mm common-grade carbon steel scrap, for example, down Yuan 20/t on day to Yuan 3,240/t excluding the 13% VAT, according to Mysteel’s assessment.
Shagang’s scrap price cut, however, has not increased deliveries from the domestic scrap traders to Chinese steel mills in general, market sources noted.
“We have sped up deliveries to our mill customers in the prior two weeks, and the present prices are even below our collection prices from our suppliers,” a scrap trader in East China’s Zhejiang province said, and their current profit margins are less than Yuan 10/t, he disclosed.
Source:Mysteel Global
