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

China-based Shagang Steel lowered its finished steel prices for the third time in June. For late-June deliveries (June 21-30) the steelmaker dropped prices by CNY100-300/mt ($15-46/mt) from those for mid-June deliveries. The company lowered long steel prices amid a plunge in the spot market driven by the government’s intervention to control prices. 


The Chinese National Development and Reform Commission (NDRC) has joined hands with the market regulator to investigate the iron ore spot market and could initiate stringent action against hoarding and speculation. Effective August 1, the country plans to standardize price index compilation and transparency of information.


Long steel

For late-June shipments, rebar (HRB400,16-25 mm) offers are at CNY5,220/mt ($807/mt) ex-works. Offers for wire rods (HPB300, 8mm) remained unchanged since early June shipments at CNY5,710/mt ($883/mt) ex-works inclusive of 13pc VAT. 

Since May 20, rebar listed prices dropped by CNY1,050/mt. A decline in steel futures and iron ore could weigh steel prices even further. Construction rebar prices in the spot market dropped by about 19pc from the peak. 

Rebars made in EAFs and through long-process have dropped, shrinking profits for many steelmakers.


Flat steel

The steelmaker kept finished flat steel prices unchanged following global cues. 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, Q235 150mm billet prices were at CNY4,850/mt ex-works Tangshan mills, including VAT, declining CNY160/mt in ten days. 

On June 11, the steelmaker had slashed long steel prices by CNY150-300/mt ($23-47/mt) for mid-June domestic shipments.


Shagang Steel’s retail prices for end-June

Shagang Steel’s retail prices for end-June shipments
ProductsGradeCNY/mtChange over mid-June  
Threaded stripsHRB40058000
Hot-rolled coilQ235B60800
Wide plateQ235B61500


Iron ore prices drop 

Chinese spot 62pc iron ore prices on June 21 were at $206.6/mt cfr north China, down by over $13/mt from the peak on June 17. Work at Vale Timbopeba is likely to resume at over 80pc capacity of its total 12mn mt per annum capacity in the next two months. 


Two price hikes for ferrous scrap in June 

The electric-arc-furnace (EAF) steelmaker raised its steel scrap procurement prices twice in June. After the price hike made on June 11 by CNY100/mt ($15.6/mt), it raised prices again by CNY80/mt effective June 16 to CNY3,780-3,830/mt delivered Zhangjiagang works in East China’s Jiangsu province, including VAT. Ferrous scrap inventories depleted sharply as consumption picked up amid steady finished steel demand and output. 




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