Chinese steelmakers have resumed trades at higher prices after returning from the Golden week holidays. Shagang and Rizhou Steel have increased their domestic ferrous scrap purchase prices by CNY30/mt ($4.3/mt) effective Oct 12. Increase in steel futures post-Golden week holidays pressured steelmaker to lift prices. In line with the jump in futures by 2-4pc, Chinese buyers resumed post-holidays restocking giving a boost to the domestic market.
Bids for domestic HMS scrap are at CNY2,750/mt ($410/mt) delivered Jiangsu works, up CNY30/mt from last prices announced before the Golden week holidays. The prices recovered after falling from a peak of CNY2,800/mt delivered Zhangjiagang works inclusive of 13pc value-added tax in early September.
Rizhou Steel also hiked in 8mm HMS scrap purchase prices by CNY30/mt to CNY2,780/mt delivered plant. Leading steelmakers held domestic finished steel prices stable for October deliveries. Rebar trades concluded at CNY3,670-3,700/mt ex-works, up CNY40-50/mt from early October.
Shagang Steel’s rebar, HRC prices flat
The company has announced new prices for mid-October shipments, effective Oct 11. Shagang offers rebar (HRB400,16-25 mm) at CNY3,900/mt ($581/mt) ex-works for deliveries during Oct 11-20. The company will offer wire rod at CNY4,060/mt ($605/mt) ex-works. Shagang held it’s finished flat steel prices stable too. The retail price of HRC Q235B material is CNY4,380/mt ($641/mt) ex-works, flat since early September deliveries.
Domestic billet prices up CNY80/mt
Chinese domestic billet traded at CNY3,370-3,390/mt ($487-488/mt) ex-Tangshan works, up from the lows of CNY3,400/mt ex-Tangshan before the golden week holidays.
Vietnamese mills sold 20,000mt billet to a Chinese buyer for December shipment at $437/mt cfr China. Most offers were at $445-450/mt cfr China on Oct 12.
“For two weeks, we expect Asian market likely to see uptrend driven by Chinese recovery, however, it would slowdown again towards year-end,” said a trader.
There is uncertainty in the global market due to a possibility of the second wave of COVID-19 infections in Europe, making the US dollar stronger against euro and pound. Another reason is the US presidential election scheduled for Nov 3.
Iron ore prices inch up
Despite expectations of a drop in prices, iron ore import prices rose by $2.7/mt to $125.6/mt cfr China for 62pc Fe content after hitting a low of $115/mt cfr China. EAF utilization remains low but with more mills booking domestic scrap, consumption is likely to pick up in the coming days. There are 71 EAF mills operational in China at an average utilization rate of 70.31pc, down 3.68pc from last week.