China's Shagang Steel increases scrap purchase price sharply
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Eastern China's EAF steelmaker �" Shagang Group has hiked scrap purchase prices for all grades. The price for HMS (6-10 mm) now stands at RMB 3,490/t ($532), inclusive of 13% VAT, delivered to headquarters works at Zhangjiagang North of Shanghai in China. Prices for other grades like HMS (10-20 mm) thickness is now at RMB 3,520/t ($536) and HMS (not less than or equal to 20 mm) thickness stands at RMB 3,550/t ($541).
Reasons behind price increase -
- Bullish steel sentiments - In Northeast China, domestic scrap prices gradually rose, driven by the prices of semi-finished steel billet and finished steel as scrap suppliers were not active in shipment and the scrap arrival decreased.
- Hike in imported scrap offers from Japan - Japanese scrap suppliers have raised export offers to China after seeing bids in the Kanto tender that concluded last week. The most preferred HRS 101 grade scrap is being offered at $500/t CFR China basis. However, bids are at $485-490/t CFR China levels. Traders highlighted limited trades but are hopeful that it would pick up after the Golden week holidays scheduled from 29th April to 5th May.
- Shagang hiked long steel price by RMB 200/t ($31) for mid-Apr -The company has increased its construction steel prices by RMB 200/t for mid-Apr sales, effective from 11th Apr'21 till 20th Apr'21. Rebar (16-25mm) stands at RMB 5,250/t ($800) ex-mill.
- Surge in Chinese billet prices - As on 9th Apr'21, Tangshan Q235 150mm square billet price in North China rose by RMB 80/t w-o-w. Currently, the billet prices in the Tangshan market Northeast China being at 5,040/t ($768) in Tangshan, including 13 % VAT.
Outlook - The prices of semi-finished and finished steel rose sharply, boosting the confidence of scrap market as the mills are actively pursuing higher production targets. This in turn may keep scrap prices strong in near term.
