Shagang Group (Shagang), China's leading electric arc furnace (EAF) steelmaker, has increased its steel scrap purchase prices by 30 yuan/tonne ($4.3/t) effective 30 May to attract more deliveries to its steel mills.
Shagang, headquartered in Zhangjiagang city in East China's Jiangsu province, is paying 2,780-2,840 Yuan/t for domestically produced HMS grade scrap, including delivery to the plant and 13% VAT, after the adjustment, according to the company's latest statement.
China's overall scrap supply has tightened recently due to a slowdown in outdoor scrap recycling and processing activities in hot and humid weather.
Strength in rebar contracts on the Shanghai Futures Exchange (SHFE) has also boosted sentiment in the steel market, giving some mills the confidence to increase their raw material purchase prices.
On Monday, the most-traded October rebar contract on the SHFE closed day trade at 3,511 Yuan/t, up 64 Yuan/t from last Friday's closing price.
The price of 6-8 mm medium grade carbon steel scrap at the spot market in Zhangjiagang increased by 20 Yuan/t to 2,420 Yuan/t excluding 13% VAT as of Tuesday morning.
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