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Shagang raises scrap price by $7.7/t to attract supply

Posted on 29 September 2021

Shagang Group (Shagang), a leading electric-arc-furnace (EAF) steelmaker in China, has added Yuan 50/tonne ($7.7/t) onto its domestic steel scrap procurement price starting September 27, which is interpreted by the market sources as an attempt to encourage more deliveries from the buyers.

 

The mill, headquartered in Zhangjiagang, East China’s Jiangsu province, is paying Yuan 3,760-3,820/t for the domestically-sourced HMS grade scrap including the delivery and the 13% VAT effective Monday, and as always, Shagang’s scrap price adjustment has triggered a round of scrap price increments nationwide, with another 26 Chinese steel mills adding Yuan 20-100/t onto their steel scrap procurement prices.

The price of 6-8mm common grade carbon steel scrap in the spot market in Zhangjiagang, thus, immediately gained Yuan 20/t from last Friday to Yuan 3,270/t excluding the 13% VAT by Monday morning, according to Mysteel’s assessment.

“Steel mills in many regions of China, especially in Jiangsu have been facing intensified restrictions on their energy consumption and thus lower steel output, but on the other hand, many including Shagang still need to fulfill finished steel under term contracts, so they have the hardcore need for scrap,” a Shanghai-based market watcher said. Besides, “Shagang probably intends to replenish some scrap to maintain normal operations during the long National Day holiday over October 1-7,” she added.

As of September 26, a made-up working day before the National Day holiday, daily scrap delivery to Shagang’s Zhangjiagang steelworks fell by about 45.7% on week to 13,298 tonnes/day, Mysteel’s other survey showed. 

Despite higher prices, some scrap traders have opted to wait and see for a while instead of accelerating the deliveries, as “recent step-ups in restricting domestic steel output have forced me into a fast in-and-out practice, so my scrap stocks on hand are rather limited for now,” a scrap trader in East China’s Zhejiang province commented.

Source : Mysteel Global