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

China’s Jiangsu Shagang Group has announced a price hike for finished long steel prices for early-January deliveries following rising raw material prices and recovery in steel futures. Prices of flat products recorded a sharp hike driven by high global auto demand. Chinese mills are discounting a possibility of a correction in prices before the Lunar New Year holidays despite weak demand. A sudden drop in temperature in the different regions has also impacted infrastructure activities. 


Long steel

Shagang Steel raised local rebar (HRB400,16-25 mm) prices by CNY150/mt () from December end to CNY4,650/mt ($720/mt) ex-works for Jan 1-10 deliveries in the spot market. The company lifted offers for wire rod (HPB300, 8mm) to CNY4,860/mt ($752/mt) ex-works. All these prices are inclusive of 13pc VAT. 


Shagang steel will offer HRC (Q235B) in the retail market at CNY5,230/mt ($809/mt) ex-works for early-January deliveries. In the export markets, Chinese HRC prices ranged at $680-700/mt fob China, stable from late December while up $100-120/mt from early December. 


Following the rise in domestic prices, export prices could rise. Globally, demand for HRC is strong but despite this HRC maker Rizhao Steel announced a price cut by CNY180/mt ($27.5/mt) amid easing iron ore supply. A few other blast furnace-route steelmakers have also lowered HRC prices. 

Shagang Steel’s retail prices for Early-December
ProductsGradeCNY/mtChange from end-Dec
Rebar wire rodHRB4005000150
Hot-rolled coilQ235B5230800
Wide plateQ235B5050500


On Jan 4, prices for Q235 150mm square billets were CNY3,790/mt ($587/mt) ex-Tangshan, up CNY50/mt from a day prior. On the other hand, prices dropped by CNY230/mt from Dec 21. Cold weather conditions had dampened demand significantly at year-end.  


Chinese iron ore prices Monday rebound to CNY164/mt cfr north China, up $5/mt from a prior day. Historically, post-New Year Holidays, the temperature rises in China giving a boost to construction activities and rebar demand. Mills have turned optimistic on demand and started restocking iron ore. 


Domestic scrap and imports prices 

Effective Jan 1, the Chinese government has allowed imports of ferrous scrap as per new standards. Chinese mills have already started inquiries for steel scrap both in containers and bulk, giving a lift to the global ferrous scrap prices. There were a couple of small bulk deals in China.


Baosteel bought 3,000mt HS around $450-480/mt cfr Shanghai from Mitsui Trading on Jan 1. Judong Company bought 2,800mt HS scrap from Heiwa Shoji on Jan 2 cfr Zhejiang Taizhou, according to sources. There is still a gap of over $50/mt in the domestic and imported scrap prices as mills look to understand the viability of imports. 


Domestic scrap procurement prices in China remain on an uptrend. Electric-arc-furnace (EAF) steelmakers maintained their steel scrap procurement prices high in order to secure materials amid short supply. Chinese domestic ferrous scrap traded at CNY3,020-3,050/mt delivered mill for HMS 6-10mm thickness.



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