Shagang holds list prices for steel longs for mid-July sales

Shagang Group (Shagang), China's leading privately-owned steel firm and the country's largest electric-arc-furnace steelmaker, has decided to maintain its long-product list prices for sales over July 11-20 from the first ten days of the month, according to the company's latest announcement.

The Zhangjiagang-based steel group updates its list prices for long products such as rebars three times a month to better reflect market dynamics, as reported.

With its latest pricing policy, Shagang continues to keep its price for HRB400 16-20mm rebar at Yuan 3,400/tonne ($501/t), its price for HPB300 6-10mm wire rods is still at Yuan 3,440/t, and that for HRB400 8-10mm bar-in-coil remains at Yuan 3,530/t, according to its announcement. All prices are EXW and include the 13% VAT.

In rolling over its prices, Shagang is trying to protect its profitability against dropping long steel prices, as well as to bolster market confidence amid weakening market sentiment and sluggish spot transactions, a Shanghai-based analyst pointed out.

Typhoon Maysak and Super Typhoon Bavi have brought torrential rains and strong gales to vast areas in East China and South China over early July, prompting a complete shutdown of most coastal construction projects and severely disrupting regional logistics operations, as reported.

As such, spot transactions of long steel products declined, with the tonnage of rebar, wire rod and bar-in-coil traded among 237 trading houses under Mysteel's tracking averaging 88,329 tonnes/day over early-July, down by 3.9% or 3,598 t/d from the level in late-June.

The extreme weather conditions have further eroded the traders' confidence in the market, already weakened by the subdued end-user demand in the summer off-season, the analyst added.

For instance, on July 10 Mysteel assessed the spot price of Shagang-brand HRB400E 20mm rebar in Shanghai – Shagang's key sales market – at Yuan 3,130/t, down by Yuan 30/t from June 30.

Meanwhile, Zenith Steel and Jiangsu Yonggang Group, two steelmakers also based in East China's Jiangsu province, also held their list prices for long steel items unchanged for the same sales cycle, Mysteel Global learned.

Source:Mysteel Global