China-based Shagang Steel lowered its finished steel prices for mid-June deliveries (June 11-20) by CNY150-300/mt ($23-47/mt) from the last set of prices for early-June deliveries. The company lowered long steel prices amid a plunge in the spot market prices driven by the government’s intervention to control prices. But production curbs and a jump in iron ore could keep prices firm. On Monday, trading was closed for the Dragon Boat holiday.
For Mid-June shipments, rebar (HRB400, 16-25 mm) offers were at CNY5,320/mt ($831/mt) ex-works. Offers for wire rods (HPB300, 8mm) remained unchanged from early June shipments at CNY5,710/mt ($892/mt) ex-works inclusive of 13pc VAT.
Since May 20, rebar listed prices dropped by CNY950/mt. With a recovery in demand and a rise in iron ore, however, prices could rebound.
The steelmaker kept finished flat steel prices unchanged in line with global levels. Demand for flat steel is comparatively healthy. Offers for HRC Q235B were at CNY6,080/mt ($950) ex-works, while export offers were at $980-1,000/mt fob China.
In the domestic market, prices of Q235 150mm billet were at CNY5,010/mt ex-works Tangshan mills including VAT. EAF-made and long-process rebar prices have dropped, shrinking profits for many steelmakers.
Earlier, on June 1, the steelmaker had slashed long steel prices by CNY250-400/mt for early-June domestic shipments and raised flat steel prices by CNY50/mt.
Shagang Steel’s retail prices for mid-June
|Shagang Steel’s retail prices for mid-June|
Iron ore prices up
Chinese spot 62pc iron ore prices were above $219/mt cfr north China on Friday. Iron ore prices rose by over 20pc in a month and supply concerns could increase them further. Iron ore port inventory has hit a four-month low, and weekly shipment arrivals have declined. Brazil-based Vale SA has halted production at two mines and decommissioned a dam over safety concerns.
Ferrous scrap prices rise $15/mt
On June 11, the electric-arc-furnace (EAF) steelmaker raised its steel scrap procurement prices for HMS by CNY100/mt ($15.6/mt) to CNY3,700-3,750/mt delivered Zhangjiagang works in East China’s Jiangsu province, including VAT. Scrap prices were up for the first time after witnessing declining CNY600/mt since May 16. A recovery in finished steel futures and stable demand is likely to lift prices further.