China’s Jiangsu Shagang Steel has lowered its finished steel prices for late May deliveries (May 21-31) by CNY300/mt ($47/mt) from mid-May deliveries, while the steelmaker has kept its flat steel prices unchanged on strong demand. Despite high production costs, the company lowered prices for long steel to match the plunge in the spot market.
Chinese government’s last week intervened to tame raw material and steel prices resulting in a sharp fall in steel futures. High steel and commodity prices tend to threaten the country’s economic growth. Prices of billet, rebar and HRC dropped by more than $80-100/mt in a week.
For late-May shipments, rebar (HRB400,16-25 mm) will be offered at CNY5,850/mt ($910/mt) ex-works. Offers for wire rod (HPB300, 8mm) dropped to CNY6,010/mt ($934/mt) ex-works inclusive of 13pc VAT.
In the domestic market, prices of Q235 150mm square billet settled at CNY4,920/mt ex-works Tangshan mills including VAT, falling over CNY550/mt ($86/mt) in a week. On Friday, billet traded at CNY5,470/mt ex-Tangshan.
The steelmaker has decided to keep finished flat steel prices unchanged as they are in line with global levels while demand for flat steel is comparatively higher. Offers for HRC Q235B at CNY6,030/mt ($937) ex-works with export offers at $970-980/mt fob China.
|Shagang Steel’s retail prices for late-May|
|Rebar wire rod||HRB400||6200||-300|
Iron ore prices tumble
Chinese spot 62pc iron ore prices tumbled below $200/mt cfr north China on Monday. Prices fell sharply after hitting a high of $233/mt cfr North China in early May.
Ferrous scrap bids lower
Shagang steel announced its six successive price cut in the period May 16-24, with prices down by CNY500/mt from its peak. For HMS 1&2 (80:20) offers at CNY3,700-3,720/mt delivered Jiangsu works, including 13pc VAT.
Offers for P&S (HRS101) grade from Japan in small bulks rose to $560-570/mt cfr China last week, which are expected to drop below $540-545/mt cfr China this week. Japanese scrap export prices are under pressure after Hyundai Steel lowered bids by JPY1,000/mt late last week. The steelmaker received active responses amid increasing supply despite the price cut.