Scrap prices have been mainly stable in China over the past week, but appear likely to face downward pressure in the future due to the situation in the finished steel market. At present, steel mills are seeing reduced margins and so they have lowered scrap purchase prices given the decline in steel prices.
Product name |
Specification |
Place of origin |
Price (RMB/mt) |
Weekly change (RMB/mt) |
Price ($/mt) |
Weekly change ($/mt) |
HMS scrap |
> 6 mm |
Jiangsu |
3,030 |
- |
446 |
- |
Shandong |
2,850 |
- |
420 |
- |
Current mainstream quotations of heavy scrap in Jiangsu Province are at RMB 2,950-3,000/mt ($434-442/mt), unchanged week on week, while the purchase prices in this province for cut grade scrap remain at RMB 3,030-3,080/mt ($446-454/mt). In Hebei Province, mainstream purchase prices of steel mills for heavy scrap are at RMB 2,900-2,970/mt ($428-438/mt), while market prices for heavy scrap in northeastern China are at RMB 2,900-3,050/mt ($427-449/mt), remaining neutral week on week. Meanwhile, scrap prices in Hubei Province are at RMB 2,850-2,900/mt ($421-428/mt), also unchanged week on week.
In the week in question, some medium and small sized electric furnace-based steel producers in Jiangsu Province, where a general rise in scrap prices was observed in the previous week, have reduced their scrap purchase prices. Even the large mills, which have been maintaining unchanged purchase prices, will also likely decrease their prices due to the lower prices of rebar and hot rolled coils. It is heard that scrap supply in the market in Jiangsu has begun to increase, and that scrap traders have started to sell their materials.
Looking at the current domestic scrap market, even given the tight supply situation, it is still appears hard to prevent the downward trend of scrap prices. Since the beginning of summer, the overall scrap collection volume has seen a decline, resulting in tight supply in most regions. In addition, overseas scrap prices are relatively high, and so are of little use in helping to resolve the situation of tight supply. Domestic steel prices will constitute the main factor influencing scrap prices in the coming period.
Meanwhile, China's scrap import market is still in a weak situation, with ex-US shredded scrap offered to China at $420-430/mt (CFR) and with quotations of ex-Japan H2 scrap offered to China at the level of $370-380/mt CFR, both unchanged week on week.