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 the late-December deliveries following a sharp rise in steel futures. Demand for construction steel continues to rise but a shortage of raw materials is forcing mills to push finished steel asking rates up. With growing interest of investors in the commodity market, the outlook for Q1 2021 remains positive. Chinese mills omitted the possibility of a drop in prices before the Lunar new year holidays in the country. 


Long steel

Effective Dec 21-31, the company will offer its local rebar (HRB400,16-25 mm) at CNY4,500/mt ($688/mt) ex-works, up CNY200/mt from the mid-December deliveries in the spot market after discounts. The company held retail prices for wire rod (HPB300, 8mm) flat at CNY4,850/mt ($740/mt) ex-works. All these prices are inclusive of 13pc VAT.  

Another leading rebar maker Yonggang Group raised its prices for (HRB400, 16‑25 mm) by CNY250/mt ($38/mt) to CNY4,530/mt for December 21‑31 deliveries. Demand for rebar, however, could lose steam because of winter. Thus, many industry sources anticipate that room for a further rise is limited now.


Shagang Steel’s retail prices for End-December
ProductsGradeCNY/mtChange from mid-Dec
Rebar wire rodHRB40048500
Hot-rolled coilQ235B44300
Wide plateQ235B45500

Flat steel

Globally, demand for HRC has been very strong. Also, the consumption and price rally in the flat product is higher than that of long products. Prices for HRC though remained unchanged. Demand for Turkey and CIS-origin HRC pushed prices to a multi-year high.  

Shagang offered HRC (Q235B) at CNY4,430/mt ($676/mt) ex-works for late-December deliveries. In the export markets, Chinese HRC prices ranged at $700-710/mt fob China, up $60/mt from late last week and up $100-120/mt since early December.


Billet and domestic scrap  

Chinese domestic billet prices reported a sharp rise by CNY280-300/mt within two days. On December 22, prices for Q235 150mm square billets were CNY4,020/mt ($615/mt) ex-Tangshan, up CNY20/mt from a day prior.  


Domestic scrap procurement prices in China remained on an uptrend amid strong demand. The electric-arc-furnace (EAF) steelmakers maintained its steel scrap procurement prices high in order to secure materials amid short supply. Domestic scrap traded at CNY2,900-3,000/mt delivered mill for HMS 6-10mm thickness.

Chinese government has allowed imports of ferrous scrap classified under ‘recycled raw materials’ effective January 1. In detailed updates on standard steel scrap to be allowed for imports is awaited and likely to be announced on January 1. Chinese mills have already started inquiries for steel scrap both in containers and bulk, giving a lift to the global ferrous scrap prices.  






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