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

China’s Shagang Steel rolled over its finished long steel prices for early July while reducing HRC export prices by CNY150/mt ($23.2/mt) following global trends. Most steelmakers are relieved to see no major changes in the steel policy announced on July 1st. The country has ramped up efforts to standardize price index compilation and bring in transparency.


Flat steel

The steelmaker lowered its finished flat steel prices following global cues. Offers for HRC Q235B were at CNY5,930/mt ($918) ex-works, down CNY150/mt ($23.22/mt) while export offers were at $920-950/mt fob China, down over $50/mt from late June. Piling of inventories also added to bearish sentiments. Demand for flat steel is mixed amid automakers’ production cuts. 


The imposition of 15pc export duties on Russian goods has pressured many Russian steelmakers to sell their inventories latest by August 1 to avoid additional export taxes. This dampened HRC market sentiments despite strong demands.


In a couple of bulk deals, Russian HRC traded at $50-70/mt below international levels. While in India, due to slow domestic demand for flat steel, HRC makers announced a price cut of Rs1,500-2,000/mt ($20-27/mt) for July shipments.


Long steel

For early-July shipments, rebar (HRB400,16-25 mm) offers are unchanged at CNY5,220/mt ($808/mt) ex-works. Offers for wire rods (HPB300, 8mm) have remained unchanged since early June shipments at CNY5,710/mt ($884/mt) ex-works inclusive of 13pc VAT. After registering a drop by CNY1,050/mt since late May, listed prices of rebar have been rolled over for early July. 


Amid tight supply, both iron ore and imported ferrous scrap prices have remained elevated resulting in high input costs and margin squeeze. 


In the domestic market, Q235 150mm billet prices were largely unchanged from late June at around CNY4,850/mt ex-works Tangshan mills, including VAT.

Shagang Steel’s retail prices for early-July shipments
ProductsGradeCNY/mtChange over end-June  
Threaded stripsHRB4005700-100
Hot-rolled coilQ235B5930-150
Wide plateQ235B6000-150

Iron ore prices recover 

Chinese spot 62pc iron ore prices on July 2 were at $217.3/mt cfr north China, down by $1.5/mt from a day prior, however, the same was up by over $11/mt from June 21. Strengthening steel futures are expected to push prices further up. 


Ferrous scrap prices recover

Amid tightening supply, Shagang Steel raised its ferrous scrap procurement prices, undoing the drops seen in late June. Prices for HMS 6-10mm recovered by around CNY200/mt in East China’s Jiangsu province to CNY3,700-3,750/mt delivered Zhangjiagang works, including VAT. Ferrous scrap inventories depleted sharply as consumption picked up amid steady finished steel demand and output. 



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