Chinese scrap market prepares to rise

SteelOrbis Shanghai Over the past week, scrap prices began to see an increase in Alashankou, while prices in the northwestern region were also preparing to rise. On January 17, heavy scrap prices in Zhangjiagang, southern China, were at RMB 2,080/mt ($268/mt), while those in Alashankou, northern China, had risen RMB 90/mt to RMB 1,810/mt ($232/mt). Since the market in Alashankou mainly supplies imported scrap from Kazakhstan and other CIS countries, the strong performance of scrap in the international market boosted up local market prices in spite of the sluggish level of commercial activity. As regards the western and northern regions, the mills there made frequent adjustments to their purchase prices. Shougang, Tianjing Steel Pipe, and some other mills hiked their purchase prices of heavy scrap by RMB 30-50/mt ($4-7/mt). Following these adjustments, the heavy scrap price of Shougang is now at RMB 2,100/mt ($270/mt), while that of Tianjin Steel is at RMB 2,050/mt ($263/mt). With regard to the eastern China's Jiangsu region, prices showed quite stable movement. Shagang and other leading mills kept their prices unchanged, thus maintaining the steady trend. Currently, heavy scrap prices in Wuxi are around RMB 2,100-2,150/mt ($270-276/mt), those in Changzhou are at RMB 2,100/mt ($270/mt), while those in Suzhou are in the range of RMB 2,080-2,100/mt ($268-270/mt). As for the situation of the international scrap market, an overall good performance has been seen. Tokyo Steel Manufacture Co. raised its scrap prices by YEN 500/mt ($4/mt) effective from January 12; thus, the CIF price of HMS#2 is now at YEN 34,000/mt ($280/mt). Influenced by such a strong movement in the international market, China's scrap prices are expected to go up in the coming period.