On August 8, Jiangsu-based Shagang Group, China’s largest private steelmaker, announced a decline in its scrap purchase price after a few rounds of increases, as slower demand, decreasing rebar spot prices and futures prices have exerted pressure.
Accordingly, the company has decreased its scrap purchase price by RMB 30/mt ($4.2/mt), signaling bearish sentiments as regards the future prospects for the scrap market. Shagang’s purchase prices for heavy melting scrap, HMS 1, 2 and 3 grades, have decreased to RMB 3,010/mt ($420/mt), RMB 2,980/m ($416/mt) and RMB 2,950/mt ($412/mt) delivered, including 13 percent VAT, respectively.
Rebar futures prices in China have declined since late last week, negatively affecting scrap prices. Rainy weather and floods have hit Hebei Province, slowing down demand for steel, while overall production has also been restricted.
$1 = RMB 7.1565