China's Shagang lifts scrap buying prices on imported scrap, futures support

China’s largest steel enterprise,- the Jiangsu Shagang Group, located in Jiangsu province, announced the first hike in its scrap purchase prices for the month of Jun’21 on 11 Jun'21. The company raised scrap procurement prices by RMB 100/tonne (t) ($16/t) for all grades, effective from today. Hike in imported scrap offers from Japan and the recent rise in Chinese steel futures have lifted scrap prices.

After the latest revision, the current price for HMS 6-10 mm stands at RMB 3,690/t ($578/t), inclusive of 13% VAT, delivered to its headquarters at Zhangjiagang, located in the north of Shanghai.

Meanwhile, prices for other grades, like HMS 10-20 mm, are at RMB 3,720/t ($582/t) and that of HMS not less than or equal to 20 mm thickness, at RMB 3,750/t ($587/t).

Chinese market highlights
China raises bids for Japanese scrap by $15-20/t: Bids by Chinese steel mills for Japanese HRS 101 grade ferrous scrap moved up further by $15-20/t, week-on-week (w-o-w). Currently, bids for Japanese HRS 101 scrap are at $535-540/t, CFR, w-o-w. However, no recent deals have been heard by SteelMint and indicative offers are at $560/t, CFR. Traders highlighted that China's steel prices are also on an uptick.

Chinese domestic billet prices up $11/t: Domestic billet prices in China observed a rise of RMB 70/t ($11/t) on 11 Jun'21 compared to those reigning at the beginning of this week, owing to further increase in steel futures. Prices of the commonly traded Q235 billet (150 mm ) were reported at RMB 5,010/t ($784/t) in Tangshan, including 13% VAT.

According to data maintained with SteelMint, the SHFE rebar futures Oct’21 contracts on 10 June’21 settled with a day-on-day (d-o-d) rise of RMB 133/t ($21/t) to RMB 5,168/t ($808/t).

Shagang lowers rebar price for mid-June sales: The company has slashed rebar prices for mid-Jun'21 sales by RMB 300/t, while keeping other long steel prices unchanged. The revised price is effective from 11 Jun’21. Rebar (16-25 mm) prices are at RMB 5,200/t ($814/t). All prices are on ex-mill basis, inclusive of taxes.

Iron ore spot price up: Spot prices of iron ore fines of Fe 62% moved up by $3.5/t to $217/t, CFR China, on 10 Jun'21 on news of the possibility of further steel output curbs in China. According to market sources, implementation of more production curbs could tighten steel supply and lift steel margins. On a weekly basis, prices have increased by around $6/t.