Jiangsu Shagang Group, China's leading electric arc furnace (EAF) steel producer, reduced its scrap purchase prices on November 3,'21. Sources confirmed that the steelmaker has reduced its scrap procurement prices by RMB 80/tonne ($13/t) for all grades, effective immediately.
With this discount, current prices of HMS (6-10 mm) stand at RMB 3,570/ton ($558/t) including 13% VAT delivered to headquarters.
He stated that, affected by the weak steel outlook, demand for scrap from Jiangsu's steelmakers has weakened. This is specifically the company's fourth price cut since October 22'21. Prices fell sharply after reaching RMB 3,860/ton ($604/ton) on Oct. 12'21.
Why are prices falling?
1- Billet prices fell.
On November 2'21, steel billet prices in Tangshan, China witnessed a sharp decline of RMB 100/ton ($16/t) daily. Domestic billet prices stood at RMB 4,800/ton ($750/t) including 13% VAT.
2 - Chinese rebar futures continue their downtrend.
Market sources said that prices have dropped significantly as it has been severely challenged by consistently weak steel demand.
3- Shagang lowered its finished steel prices for the beginning of November.
Shagang Steel has reduced its construction steel prices by RMB 600/ton ($94/t) for early November sales. Currently, rebar (16-25 mm) stands at RMB 5,550/ton ($867/t) including taxes and wire rod stands at RMB 5,660/ton ($884/t).
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