Shagang cuts scrap price by $8/t, 9th time in less a month

Posted on 18 November 2021

Shagang Group (Shagang), China's leading electric-arc-furnace (EAF) steelmaker, has been busy trimming its steel scrap procurement prices bit by bit in accordance with domestic steel price movements, and on November 17 or two days after its previous cut, another Yuan 50/tonne ($7.8/t) has gone, which has been the ninth decrease since October 22.

 

The mill, headquartered in Zhangjiagang city in East China's Jiangsu province, has reduced its scrap buying price by a total of Yuan 540/t in less than a month and it is paying Yuan 3,320-3,380/t for domestically-sourced HMS 80:20 scrap including the delivery to mill and the 13% VAT.

By the morning of November 17, the spot price of the 6-8mm common-grade carbon steel scrap in Zhangjiagang, had reflected the downtrend, down Yuan 30/t on day to Yuan 2,790/t excluding the 13% VAT as of November 17, which has also been a new low since January 8, according to Mysteel's database.

Meanwhile, China's steel market sentiment has stayed bearish with the persistent weaking in both demand and prices, and most of the Chinese steel mills, thus, have been propelled to relieve some of the burden to upstream by lowering their raw material procurement prices repeatedly just to stay above the water or to limit losses, Mysteel Global noted from the market.

As of November 16, Mysteel's series of related ferrous commodities price assessments all presented a downtrend, and other than scrap, China's national price of the HRB400E 20mm dia rebar ebbed to a new low since March 22, reaching Yuan 4,735/t, and Mysteel PORTDEX 62% Australian Fines in Qingdao hovered at its over 21-month low of Yuan 613/wmt FOT, both including the 13% VAT.  

Frequent scrap price cuts panicked some scrap traders, and they had been speeding up the deliveries to their steelmaker customers to limit their exposure to pricing risks, and as of November 16, scrap delivery to Shagang's Zhangjiagang steelworks in Jiangsu, thus, perched high at 25,000 tonnes/day, according to Mysteel's tracking.

Source : Mysteel Global