Posted on 12 Jan 2022
Shagang Group, China's largest privately-owned steel producer headquartered in East China's Jiangsu province, announced on January 11 that it will roll over its long steel prices for sales over January 11-20 from the past ten days. Shagang's rollover underscores the strong stance Chinese mills are adopting to support steel prices while limited steel stocks are available, market sources reckoned.
The latest policy followed Shagang's blanket cut of Yuan 100/tonne ($15.7/t) on all major long carbon steel over January 1-10 consisting of rebar, wire rod and bar-in-coil. Shagang releases its pricing policy every ten/eleven days and the policy is widely deemed as an indicator of the near-term domestic-market trends, especially for the long steel market in East China.
With Tuesday's announcement, Shagang's prices of HRB400 16-25mm rebar, HPB300 6-10mm wire rod and HRB400 8-10mm bar-in-coil stay unchanged at Yuan 4,900/t, Yuan 5,110/t and Yuan 5,200/t over January 11-20. All prices are in terms of EXW and including the 13% VAT.
"Mills are not willing to lower prices given the low stocks at their yards," a market watcher based in Central China's Anhui province commented.
He noted that this winter, fewer domestic steelmakers have so far introduced preferential or discount policies to encourage traders to stock up products at the moment compared with normal years. Any discounts being offered are generally low, too.
Mills' "winter stocking" policies are a common practice in China where steelmakers offer discounts to encourage traders to book steel items in advance, for products being delivered after the Chinese New Year holiday. The CNY break this year spans January 31-February 6.
The mills pursue such policies in order to secure cash before the holidays start, as steel sales will be suspended over the CNY period while mills' production needs to be maintained, Mysteel Global notes.
Fewer "winter stocking" policies rolled out by mills showed "their firm stance on prices and the limited steel availability," the Anhui source said.
"Steel output dropped a lot this winter, but steel demand did not decline as much. There are not (many) products (for the traders) to stock up," an official from a steel mill based in East China also observed.
Mysteel's latest survey showed that as of January 5, rebar stocks at 137 steel mills in China totaled 1.85 million tonnes, up for the second week but only by 2.8% on week, and the stocks were 8.9% lower on month or 28.2% lower on year.
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Shagang's premiums for other long products over Jan 11-20 |
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Specification |
Premium |
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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 |
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HRB400 36mm/40mm dia rebar |
Yuan 250/t |
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HRB500 14-25mm |
Yuan 300/t on top of HRB400 base prices |
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HRB400 6mm dia bar-in-coil |
Yuan 300/t |
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Anti-seismic rebar |
Yuan 30/t |
Source:Mysteel Global
