Chinese scrap market characterized by stability after holiday

Scrap prices have remained stable in China over the past week - the first week back after the National Day holiday. Although some traders are bullish on the prospects for the domestic scrap market in the coming period, the current situation of the steel mills is not ideal and import scrap may reenter the domestic market.

Current mainstream quotations of heavy scrap in Jiangsu Province are at RMB 2,950-3,000/mt ($440-448/mt), unchanged week on week, while the purchase prices in this province for cut grade scrap remain at RMB 3,000-3,060/mt ($448-457/mt). In Hebei Province, mainstream purchase prices of steel mills for heavy scrap are at RMB 2,900-2,970/mt ($431-442/mt), while market prices for heavy scrap in northeastern China are at RMB 2,900-3,050/mt ($433-455/mt), remaining neutral week on week. Meanwhile, scrap prices in Hubei Province are at RMB 2,950-3,000/mt ($440-448/mt), also unchanged week on week.

After the Chinese National Day holiday, the domestic scrap market has followed a stable trend. Accordingly, mills and traders are keeping a close eye on the market, waiting to see in which direction it will move. Eastern China is currently the most active region in the domestic scrap market.

Shipment volumes from most traders have not changed. However, some dealers are bullish about the market prospects, and so they have increased their purchase volumes of scrap and reduced shipment volumes in expectation of higher market prices in the coming period.

Meanwhile, China's scrap import market has continued to show a downtrend over the past week, with ex-US shredded scrap offered to China at $395-400/mt CFR, and with quotations of ex-Japan H2 scrap offered to China at the level of $340/mt CFR, down $25/mt week on week.

It is thought that China's domestic scrap market will also remain stable in the coming week.