No rise tipped for Shagang’s scrap buying prices for now
Posted on 23 February 2021
Shagang Group (Shagang), China’s largest electric-arc-furnace (EAF) steelmaker and located in East China’s Jiangsu province, has shown no inclination it aims to adjust its steel scrap procurement prices anytime soon, though many other domestic EAF and blast furnace (BF) steelmakers have already raised their buying prices after Chinese New Year (CNY) holiday ended on February 18.
Over February 18-20, a succession of steel producers across the country announced higher steel scrap buying prices, raising these by Yuan 20-190/tonne ($3.1-29.4/t), according to Mysteel’s survey.
For now, however, Shagang seems content to keep its procurement price for steel scrap unchanged and continues to pay its scrap traders Yuan 2,720-2,770/t for HMS grade scrap including delivery and the 13% VAT, unchanged since January 29.
Despite the mill’s avowed determination to continue holding its prices, that Shagang may increase prices sometime later – maybe by Yuan 50-80/t – is still very possible, a Shanghai-based source close to the steelmaker disclosed.
“Some middle and small-sized integrated mills have resumed procurement of scrap after the Chinese New Year holiday break, and this has encouraged some scrap traders to bolster their prices,” the source said. “Shagang may soon have to follow this trend,” he added.
A steel scrap supplier based in Jiangxi said he intends to steadily push through fairly mild price hikes. “We may raise our offering prices starting from Yuan 50/t, while we wait for Shagang to give a clearer signal later. Also, sentiment in the steel market after the holiday break seems quite bullish, and I have witnessed a clear revival in scrap demand from domestic steel mills, as these mills will resume or ramp up their production to their pre-holiday levels,” she commented.
On the other hand, the recent rises in prices of both finished steel and other raw materials have lent some support for domestic steel scrap to strengthen, Mysteel Global noted.
As of February 20, China’s national price of the HRB400 20mm dia rebar had surged by Yuan 224/t from February 10 to Yuan 4,582/t, and Mysteel’s PORTDEX 62% Fe Australian Iron Ore Fines also increased by Yuan 35/t from February 10 to Yuan 1,174/t, both including the 13% VAT, Mysteel’s data shows. Saturday was a compensating working day in China for the CNY holiday.Source : Mysteel Global