Over the past week, a slight price increase has been observed in China's scrap market in general. Purchase prices from steel mills in the various regions have already increased to some extent. In spite of the continuing rises in steel prices, downstream demand has not improved significantly. Also, given the rising prices in the international scrap market, import scrap prices have remained at high levels.
Product name | Specification | Place of origin | Price (RMB/mt) | Weekly change (RMB/mt) | Price ($/mt) | Weekly change ($/mt) |
HMS scrap | > 6 mm | Jiangsu | 2,930 | 50 | 430 | +7 |
Shandong | 2,780 | 50 | 408 | +7 |
Current mainstream quotations of heavy scrap in Jiangsu Province are at the level of RMB 2,900-2,950/mt ($425-433/mt) while the purchase prices in this province for shredded scrap have increased by RMB 50/mt ($7/mt) week on week to RMB 2,950-3,000/mt ($433-440/mt). In Hebei Province, mainstream purchase prices of steel mills for heavy scrap are at RMB 2,800-2,850/mt ($411-418/mt), up RMB 50/mt ($7/mt) week on week. Meanwhile, market prices of heavy scrap in Shandong Province are at RMB 2,750-2,800/mt ($403-410/mt), also up RMB 50/mt ($7/mt) week on week, and scrap prices have also increased by the same range to RMB 2,800/mt ($411/mt) in the central regions of China.
After the slight price increase seen in China's scrap market, steel mills are very cautious about raising their purchase prices for scrap. At the current juncture, although significant increases have been seen in steel prices, downstream demand has not improved greatly. The continuous increase in steel prices may be attributed to the anticipation of a strong hike in the long-term contract price of iron ore. Since the mills are already under great cost pressure, they are not in a hurry to increase their scrap purchase prices. Meanwhile, scrap traders are relatively optimistic on the prospects for the market: most of them are not in any rush to sell their materials, but are waiting for further price increases.
Import scrap prices have continued to increase in China. At the end of last week, prices of H2 scrap from Japan were up to $400-420/mt CFR, while import prices of HMS I scrap from the US were standing at $430/mt CFR and above.