China’s largest ferrous scrap user, Jiangsu Shagang Group, cut buying prices for heavy melting scrap by Yuan 20/mt ($3/mt) Tuesday, its second reduction this month.
After the cut, Shagang would pay Yuan 1,570/mt, including 17% value added tax, delivered to Zhangjiagang, for HMS with a minimum width of 6 mm.
Shagang had lowered its buying price for ferrous scrap by Yuan 20-40/mt last Saturday. Shagang’s buying price for that specification, fell by a total of Yuan 150/mt last month, as a result of declining steel prices and abundant supply of domestic scrap from the crackdown on induction furnace capacity in China.
Other major steel mills in the eastern China region, including Yonggang, Zenith and Magang, followed Shagang’s lead Tuesday by cutting scrap buying prices by Yuan 20/mt.
China has identified over 500 induction furnace steel producers nationwide, with combined capacity of these illegal units amounting to 119 million mt/year, China Iron & Steel Association said late April. All the induction furnace capacity would be scrapped by June 30, it said.