By Anil Mathews (ScrapMonster Author)

December 08, 2015 01:36:41 AM

BEIJING (Scrap Monster): The steel mills in Eastern China have announced further cut in ferrous scrap purchasing prices, in response to falling rebar and iron ore prices. The The steelmakers who have announced further cut in scrap buying prices include Jiangsu Shagang and Maanshan Iron & Steel.

Jiangsu Shagang Group announced Monday that scrap purchasing prices will be lowered by Yuan 20 per mt on account of sharp cut in rebar ex-works prices. This is the third round of cut being announced by the company during the month of December. The company has lowered the scrap purchasing prices by as much as Yuan 60 per mt during the month. After the announcement, the purchasing price for heavy melting scrap with thickness 6mm and above by Shagang Group now stands at Yuan 1,010 per mt, inclusive of 17% VAT delivered to Zhangjiagang, Jiangsu province.

Yonggang Group in the same province has announced cut of Yuan 40 per mt in purchasing prices of high quality heavy melting scrap. The scrap of least 8 mm thickness delivered to Zhangjiagang, Jiangsu province now stands at Yuan 1,070/mt. Yonggang Group had returned to the market last week after having stopped scrap purchases during early-November.

Also, Maanshan Iron & Steel has decided to lower its scrap buying prices by Yuan 20 per mt from Monday onwards. After the announcement, the company’s buy price for plate cut-offs with thickness 6mm and above now stands at Yuan 1,060 per mt, inclusive of VAT for deliveries to Maanshan.

Meantime, major steel mills including Dongfang Special Steel and Zenith Steel continued to stay away from the market.

Fears of weakening demand on account of winter are likely to keep rebar prices under pressure. This may lead to further cut in scrap purchasing prices going forward.