Posted on 31 May 2023
Shagang Group (Shagang), a leading electric-arc-furnace (EAF) steelmaker in China, has raised its steel scrap procurement prices by Yuan 30/tonne ($4.3/t) effective from May 30 to attract more deliveries to its steelworks, Mysteel Global noted.
After the adjustment, Shagang, headquartered in Zhangjiagang city, East China's Jiangsu province, is paying Yuan 2,780-2,840/t for domestic-produced HMS grade scrap including the delivery to the plant and the 13% VAT, according to the latest company release.
China's overall scrap supply has been rather tight recently due to the slowdown in outdoor scrap recycling and processing activities during the hot and humid weather, Mysteel Global learned.
As a matter of fact, the current scrap deliveries to most Chinese steelmakers couldn't meet their daily scrap consumption.
For example, the scrap volume delivered to Shagang's Zhangjiagang plant fell 12% on day or 18.5% on week to average 8,808 tonnes/day as of May 29, according to Mysteel's daily tracking.
Therefore, Chinese steelmakers had to raise their scrap buying prices to secure more materials so that their normal production could be maintained, according to a Shanghai-based market watcher close to Shagang.
Moreover, the strengthening in rebar contracts on the Shanghai Futures Exchange (SHFE) yesterday also lifted the steel market sentiment and gave some mills confidence in increasing their raw materials buying prices, according to the market watcher.
On Monday, the most-traded rebar October contract on the SHFE increased Yuan 64/t from last Friday's settlement price to close the daytime trading session at Yuan 3,511/t.
As usual, Shagang's scrap price adjustment has prompted more than 40 Chinese steel mills to raise their scrap buying prices by Yuan 20-50/t starting Tuesday, Mysteel Global noted.
And the price of 6-8mm common-grade carbon steel scrap in the spot market at Zhangjiagang rose Yuan 20/t on day to Yuan 2,420/t excluding the 13% VAT as of Tuesday morning, according to Mysteel's assessment.
Source:Mysteel Global
