This marks the seventh consecutive price decrease in scrap prices by Shagang in the past month, bringing the total price reduction to 350 Yuan/ton. With Shagang's latest pricing adjustment, scrap sellers will be paid 2,710-2,760 Yuan/ton ($374-381), including 13% VAT, for locally processed HMS quality scrap delivered to the facilities.
The company is incentivizing scrap suppliers to slow down their deliveries. The decline in steel scrap prices is causing negative margins to worsen for mini mills. Scrap inventory held at Shagang's Zhangjiagang facilities decreased by 3% weekly, reaching 482,223 tons.
The average loss in sales of construction steel products from 35 independent steel mills increased by 36 Yuan/ton weekly to 119 Yuan/ton. Following Shagang's price reduction, the processing price of 6-8 mm carbon steel scrap in Zhangjiagang dropped by 30 Yuan/ton to 2,470 Yuan/ton ($341) excluding VAT.
Over the weekend, 68 steel producers nationwide announced price reductions in steel scrap.
This situation is squeezing profit margins for steel producers and putting pressure on scrap suppliers to slow down deliveries. Steel prices may continue to decline.
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