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

China’s Jiangsu Shagang Group has decided to keep its finished steel prices flat despite strengthening domestic demand. Lunar New Year holidays from Feb 11-18 and high production volumes in January have led to a buildup of finished steel inventories at Chinese mills.


Shagang Steel holds rebar (HRB400,16-25 mm) prices for the rest of February deliveries at CNY4,700/mt ($727/mt) ex-works in the spot market. Offers for wire rod (HPB300, 8mm) and HRC are unchanged at CNY4,860/mt ($752/mt) and CNY5,150/mt ex-works. These prices are inclusive of 13pc VAT. HRC prices jumped by CNY800/mt in early January but have since remained stable. 


In the domestic market, prices for Q235 150mm square billets at CNY4,250/mt ($658/mt) ex-Tangshan on Monday, up sharply by CNY400-450/mt from early February levels. 


Shagang Steel’s retail prices for late-February
ProductsGradeCNY/mtChange from early-Feb
Rebar wire rodHRB40050000
Hot-rolled coilQ235B52300
Wide plateQ235B50500


Post-holidays, Chinese steel prices jumped by around 5-7pc on positive sentiments and pick-up in demand. In the spot market, iron ore fines Australian (Fe 62pc) traded at $176/mt cfr China on Monday, hitting a 10-year peak. While HRC export prices were at $690-710/mt fob China, up $20-25/mt from early February. 


Following Shagang steel’s lead, Zenith Steel held rebar and wire rod prices stable at CNY4,700/mt and CNY4,850/mt ex-works. Another major rebar maker, Yong steel hiked prices by CNY150/mt ($23.21/mt) on high raw materials costs.


No revision for domestic scrap 

Shagang kept its scrap procurement prices flat too. On the other hand, a few other EAF and blast furnace (BF) steelmakers in China resumed scrap buying at prices higher than pre-holiday levels.


The steelmaker’s bids for HMS were at CNY3,200-3,250/mt delivered Zhangjiagang city, Jiangsu province including 13pc VAT depending on thickness. Most yards in China have started to resist lower bids on a strong demand outlook as mills ramp-up productions. 


Fe scrap imports inquiries up 

With the allowance of ferrous scrap imports from Jan 1, Chinese mills successfully received small bulks on a trial basis from Japan and the US. Mills are in negotiations with sellers in Europe, Singapore and South Korea. In the near term, trades are expected to pick up for not only P&S but shredded as well. Chinese buyers were negotiating for European P&S at $465-470/mt cfr China, said sources on Tuesday. 



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