In the past week, Chinese domestic scrap prices have surged by around RMB 100-150/mt week on week, backed by tight supplies of scrap and increases in steel prices. Against the background of the general hike in steel prices, domestic scrap prices may continue their upward trend in the coming period.
Product name | Specification | Place of origin | Price (RMB/mt) | Weekly change (RMB/mt) | Price ($/mt) | Weekly change ($/mt) |
HMS scrap | > 6 mm | Jiangsu | 3,750 | +100 | 570 | +15 |
Shandong | 3,700 | +150 | 562 | +23 |
Current mainstream quotations of heavy metal scrap (HMS) in Jiangsu Province are at RMB 3,700-3,750/mt ($562-570/mt), while the purchase prices in this province for cut grade scrap stand at RMB 3,750-3,800/mt ($570-578/mt), up by RMB 100/mt ($15/mt) week on week. Scrap prices in Shandong Province are at RMB 3,650-3,700/mt ($555-562/mt), up by RMB 150/mt ($23/mt) week on week. In Hebei Province, mainstream purchase prices from steel mills for heavy scrap are at RMB 3,650-3,700/mt ($555-562), up by RMB 150/mt ($23/mt) week on week, while purchase prices for heavy scrap from steel mills in northeastern China are at RMB 3,650-3,850/mt ($555-585/mt), up RMB 150/mt ($23/mt) week on week. Meanwhile, scrap prices in Hubei Province have remained at RMB 3,500/mt ($532/mt), up by RMB 100/mt ($15/mt) week on week.
During the past week, Chinese scrap prices have risen in a context of higher steel prices and short supplies of scrap. After the Chinese New Year holiday, domestic steel prices started to move up, rising by around RMB 200/mt ($30/mt) in the Shanghai market. Meanwhile, the adverse weather conditions, including heavy snowfalls, in southern China have caused activity in the local scrap market to slow down, resulting in short supplies of scrap. Moreover, the inventories held by steel mills in the south are at low levels and so the mills are expected to increase their purchase volumes of scrap in the near future. Market players in China are optimistic on the prospects for the overall domestic scrap market in late February and March.
International scrap prices have declined over the past week. Ex-US shredded scrap is currently offered to China at $480/mt CFR, down by RMB 50/mt ($7.6/mt) as compared to the pre-holiday period. On the other hand, quotations of ex-Japan H2 scrap to China have remained at the high level of $480/mt CFR.