Jiangsu-based Shagang Group, China’s largest private steelmaker, has announced that as of May 26 it has cut its scrap purchase price by RMB 50/mt ($7.8/mt), signaling its bearish sentiments as regards the future prospects for the market. Accordingly, Shagang’s heavy scrap purchase price has decreased to RMB 3,600/mt ($562/mt) delivered, including 13 percent VAT.
The producer has been cutting its scrap purchase prices almost every day from early last week with the previous decreases of RMB 70/mt ($10.9/mt) on May 24 and RMB 50/mt ($7.8/mt) on May 25.
This move by Shagang indicates its bearish sentiment regarding the scrap market outlook amid the continuous declining trend in ferrous metal futures prices and local steel prices in China.
As a result, import scrap demand has stalled in China, with bids in eastern China not exceeding $490/mt CFR.
$1 = RMB 6.4099