Shagang clips ferrous scrap purchase prices by $4/t
The price reduction reflects the company's intention to shave production costs after it lifted its ferrous scrap purchase prices for three consecutive times in the past four weeks, Mysteel Global noted,
After the latest adjustment, Shagang is paying scrap dealers Yuan 2,800-2,860/t for domestically processed HMS grade scrap, including delivery to its plants and the 13% VAT, according to the announcement.
The recent slide in domestic prices of finished steel products squeezed the profit margins among both blast furnace (BF) and EAF steelmakers, pressing Chinese steel mills to reduce their purchase prices of steelmaking raw materials, Mysteel's survey showed.
On May 15, for example, the average loss on the sales of construction steel suffered by the 35 independent EAF steel mills under Mysteel's daily tracking stood at Yuan 98/t, larger by Yuan 21/t from the previous week.
On the other hand, scrap dealers have sped up their deliveries to scale down their stocks at hand after seeing the relatively weak performance of the domestic steel market, Mysteel Global learned.
As such, the volume of steel scrap arriving at Shagang's works in Zhangjiagang city in Jiangsu rose sharply to reach 17,704 tonnes/day on May 15, higher by 118% on week, according to Mysteel's tracking.
Meanwhile, the company's scrap consumption remained largely stable, so the surging arrivals cooled their buying interest in steel scrap temporarily, Mysteel Global noted.
Shagang's price clip immediately placed downward pressure on the spot prices for steel scrap in Jiangsu, with the transaction price of 6-8mm carbon steel scrap in Zhangjiagang losing Yuan 20/t from the prior day to reach 2,480/t excluding the 13% VAT by Thursday morning, Mysteel assessed.
Also on Thursday morning, another 29 steel mills nationwide announced reductions for their steel scrap purchase prices in the range of Yuan 10-100/t, Mysteel Global learned.
Written by Anthea Shi, shihui@mysteel.com
Edited by Alyssa Ren, rentingting@mysteel.com
Shagang slashes scrap buying prices by another $7/t
Aug 05, 2024 17:00
Update: Shagang cuts scrap buying prices by $4-7/t
Jun 07, 2024 15:30
Shagang cuts ferrous scrap purchase prices by $4/t
Jun 04, 2024 17:30
Shagang raises ferrous scrap purchase price by $7/t
Apr 12, 2024 15:30
Tokyo Steel smashes product prices $70-106/t for October
Sep 18, 2024 14:15
Steel scrap prices: China's major cities
Sep 19, 2024 16:46
Steel scrap procurement prices: China's major mills
Sep 19, 2024 16:18
Mysteel imported steel scrap prices
Sep 19, 2024 11:05
Stainless scrap prices: China's major cities
Sep 19, 2024 10:41
Alloy steel scrap prices: China
Sep 19, 2024 10:20