Jiangsu-based Shagang Group, China’s largest private steelmaker, has announced that as of May 24 it has cut its scrap purchase prices by RMB 70/mt ($10.9/mt). Accordingly, Shagang’s heavy scrap purchase price has decreased to RMB 3,700/mt ($574.5/mt) delivered, including 13 percent VAT.
This is the producer’s fifth price cut, with the previous decrease of RMB 70/mt ($15.5/mt) made on May 21.
This move by Shagang signals high supply, rising stocks and lower demand in the local scrap market in China and bearish view towards prospect for the future scrap market amid the continuous decreasing trend in ferrous metal futures prices and local longs steel prices.
As a result, bids for import HS scrap in eastern China have fallen to $500/mt CFR as maximum. In the north they are still higher, but also will continue to go down.
$1 = RMB 6.4408