China’s Jiangsu Shagang Steel lowered rebar (HRB400,16-25 mm) prices by CNY350/mt ($55/mt) to CNY5,500/mt ($910/mt) ex-works for deliveries in the first half of June, according to the pricing policy released on June 1. Despite high production costs, the company lowered prices for long steel to match the plunge in the spot market prices.
The Chinese government is formulating ways to control prices of raw material such as iron ore and steel in the domestic market. Higher prices raw material prices tend to slow down economic growth, which is vital to combat the impact of the COVID-19 pandemic.
Shagang cut high-speed wire (HPB300, 6.5mm) prices by CNY400/mt to CNY5,610/mt ex-works.
Steel prices continue to adjust downwards amid the start of the rainy season in southern China. Steel demand as well as the excitement among steel producers to ramp production has started to fizzle. Some steelmakers claim the gap between steel and ore prices has widened while the prices of EAF-made rebar and long-process rebar have dropped to the cost line and margins have shrunk.
Among major steel mill Zhongtian Iron and Steel cut rebar (HRB400,16-25 mm) prices by CNY550/mt to CNY5300/mt for early June shipments, while its wire (HPB300, 6.5-12mm) prices are down CNY500 at NY5,900/mt.
Earlier, on May 24, the steelmaker had slashed prices by $47/mt for domestic late-May shipments.
($1=CNY6.47)