East China-based steelmaker Shagang Jiangsu has kept its end-September delivery finished steel prices flat from mid-September. The steelmaker held prices amid limited steel demand and lowering iron ore prices, which hit a six-year high. It is less likely that Chinese domestic steel prices would revive any time soon, on the other hand, most flat steel producers have resumed exports into Vietnam and Asian markets at prices lower than current levels pressuring other exporters countries to reduce bids.
Effective Sep 21, Shagang will offer its rebar (HRB400,16-25 mm) at CNY3,900/mt ($574/mt) ex-works for deliveries between Sep 21-30. The company will offer its wire rod at CNY4,060/mt ($598/mt) ex-works including discounts, as per company official.
Chinese currency CNY has appreciated against the US dollar, which is at 6.79 Sep 22, from 6.85 levels on Sep 10. The equivalent prices have increased by $7/mt from the levels mid-September.
Shagang Steel has held finished flat steel prices stable and the retail price for HRC Q235B material is CNY4,380/mt ($641/mt) ex-works, flat since early September deliveries.
Chinese construction activities were impacted by heavy floods and the announcement of Tangshan’s stricter regulations. The demand for rebar was stable with the absence of new construction starts. Buying sentiment is subdued and steel futures remain volatile due to traders’ restocking ahead of holidays. Also, the possibility of another wave of COVID-19 would keep demand unstable in the coming days.
|Shagang Steel’s retail prices for late September|
|Rebar wire rod||HRB400||4200|
Plunge in iron ore, scrap prices
Chinese steelmaker expects their input costs to ease with the drop in iron ore prices from a six-year high while ferrous scrap prices dropped from a 13-month high. On Sep 21, iron ore prices for Fe content 62pc cfr North China was at $120/mt, down sharply from $125.2 a day prior.
Shagang Steel lowered prices twice effective Sep 12 and 16, down total CNY60/mt, amid falling domestic billet prices. Effective Sep 16, bids for domestic HMS scrap stand at CNY2,740/mt ($404/mt) delivered plant in Jiangsu province. On Sep 21, domestic billet prices in China dropped by CNY60/mt from a day prior to CNY3,320/mt ex-works Tangshan, this lowered steel prices further.