Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

China’s Jiangsu Shagang Group has hiked rebar prices for mid-January deliveries following high domestic scrap prices amid short supply. Steelmakers decided to increase rebar prices by CNY50/mt despite the slowing of construction activities due to a cold wave sweeping across China. Prices of other finished products are kept unchanged. Rebar, HRC and iron ore price have recorded a successive drop in the futures market with a 6-8pc dip in the last few days.  


Domestic ferrous scrap prices in China have increased in January amid strong global cues and tight supply. With the resumption of ferrous scrap imports from China, traders expect a bullish market in Q1 2021 and mills are discounting a possibility of a price correction before the Lunar New Year holidays despite weak demand. Lockdowns in some provinces amid a resurgence of COVID-19 infections could increase the production cost for some steelmakers. Provinces like Hebei have restricted travel and logistic and are mulling the closure of interprovincial borders, which has impacted transportation of material and pushed up local freight costs.


Shagang Steel raised local rebar (HRB400,16-25 mm) prices for Jan 1-10 deliveries by CNY50/mt ($7.7/mt) from early January to CNY4,700/mt ($720/mt) ex-works in the spot market. Offers for wire rod (HPB300, 8mm) are unchanged at CNY4,860/mt ($751/mt) ex-works. All these prices are inclusive of 13pc VAT.


Shagang Steel’s retail prices for mid-January
ProductsGradeCNY/mtChange (early-Jan)
Rebar wire rodHRB40050000
Hot-rolled coilQ235B52300
Wide plateQ235B50500


Shagang will offer HRC (Q235B) in the retail market stable at CNY5,230/mt ($809/mt) ex-works for mid-January deliveries. While in the export markets, Chinese HRC prices heard at $670-690/mt fob China, marginally down from late December. 


Prices for Q235 150mm square billets at CNY3,810/mt ($589/mt) ex-Tangshan on Monday. 


Iron ore prices have eased in China with increased imports of Australian ore. Australian iron ore fines (Fe 62pc) traded at $171.1/mt cfr China on Monday, down $0.65/mt from the prior day. Subdued steel consumption and rising steel inventories amid cold weather condition have pressured steel prices and producers’ margins. Iron ore shipments from Port Hedland to China rose to 40mn mt in December, up by 16pc from November, according to the Pilbara Ports Authority.


Shagang hikes domestic scrap prices 

With the allowance of ferrous scrap imports from Jan 1, Chinese mills bought scrap in small bulks on a trial basis from Japan. Importers have increased inquiries for steel scrap both in containers and bulk. Last week, Shagang Steel raised domestic HMS scrap procurement prices by CNY150/mt ($23.2/mt) effective Jan 9. The steelmaker has hiked prices by CNY230/mt in two successive raises in January. Shagang’s bids for HMS (6-10mm) is at CNY3,250-3,310/mt delivered Zhangjiagang city, Jiangsu province including 13pc VAT.


EAF-based steelmakers have maintained bids at high levels to secure scrap amid short supply. This week, domestic HMS (6-10mm) is offered above CNY3,150-3,200/mt ($487-493/mt) delivered mill amid rising competition to secure inventories.




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