Similar to the
iron ore market, the suppliers and consumers of
scrap in
China are at a stalemate. Steelmakers are reducing their purchasing prices, while traders are not accepting such decreases.
However things are slightly different in the
scrap market. The result of the international
iron ore price negotiations has not yet come out but international
scrap prices have already seen sharp increases. Therefore steelmakers are failing to bargain prices. Currently, the price of
scrap in Chinese markets is around RMB 1,850-2,000/mt ($230-249) level.
In 2005,
China consumed 63 million metric tons of
scrap, 12 million metric tons of which was imported. In 2006, she is expected to consume 70 million metric tons, including 14 million metric tons of imports.
Insufficient
scrap supply and high prices are expected to be an obvious characteristic of Chinese markets through 2006.