Chinese Steel mills announce cut in ferrous scrap buying prices

BEIJING (Scrap Monster):  Many steel mills in Eastern China have announced sharp cuts in ferrous scrap buying prices. This is on the back of declining rebar prices, sources said.

 

The purchasing price for heavy melting scrap with thickness 6mm and above by Jiangsu Shagang Group saw a cut of Yuan 30/mt. After adjustment, the company will pay Yuan 1,450 per mt, inclusive of VAT delivered to Zhangjiagang. This is the company’s first price cut during the month of June this year. The company on May 24th had announced cut of Yuan 20/mt in scrap buying prices.

 

According to Shagang Group-the largest scrap consumer in the country, the falling rebar costs have led to sharp drop in raw materials costs, which has forced the company to lower the scrap buying prices. In Shanghai retail market, the prices of 18-25 mm diameter HRB400 rebar lost almost Yuan 40/mt on Friday to range between Yuan 2,120-2,140/mt inclusive of 17% VAT. However, the scrap prices are expected to remain little changed in the near future.

 

Changzhou Dongfang Special Steel too decided to reduce the purchasing price of heavy melting scrap of thickness 6 mm and above. After adjustment, the scrap buying prices quoted at Yuan 1,350 per mt, inclusive of VAT for deliveries to Changzhou, Jiangsu province. This is the first cut in scrap buying prices by the mill since May 23rd.

 

Other steel mills in the region are expected to announce further cut in scrap purchasing prices. However, scrap prices are expected to manage some sort of support after the current round of cuts, industry participants hoped.