The Chinese scrap market has continued to see a minor increase in some regions over the past week. Meanwhile, many medium- and small-scale mills in eastern China have recently hiked their purchase prices. Despite its recent rebound, the domestic finished steel market still does not present a reassuring picture, while scrap imports to China have also increased: in this context, the domestic scrap market has failed to show an overall upward movement in recent days.
Product name | Specification | Place of origin | Price (RMB/mt) | Weekly change (RMB/mt) | Price ($/mt) | Weekly change ($/mt) |
HMS scrap | > 6 mm | Jiangsu | 2,530 | 30 | 371 | 4 |
Shandong | 2,550 | - | 374 | - |
Over the past week China's domestic scrap market has seen a minor rise in some regional markets. At present, mainstream quotations of heavy scrap in Jiangsu Province are up by RMB 30/mt ($4/mt) to the range of RMB 2,500-2,550/mt ($371-374/mt) while the purchase prices of some mills in this province for shredded scrap are at RMB 2,550-2,600/mt ($374-381/mt), up RMB 30/mt ($4/mt) week on week. Meanwhile, market prices of heavy scrap in Shandong Province and Tianjin have remained constant at RMB 2,500-2,600/mt ($367-381/mt).
Under the influence of the recovery in the recent finished steel market, scrap prices in China have moved up slightly in some regional markets over the past week. In spite of the unfavorable conditions in the steel market, prices of rebar, HRC and other products have registered a sharp ascension of RMB 300/mt ($44/mt) or so in recent days, which may be due to market speculation or improved demand. As a result of the increased steel prices, some mills have raised their purchase prices for scrap, with the purchase prices rising to the level of RMB 2,600/mt ($381/mt) according to some eastern-based mills. Looking at the current situation, only medium- and small-scale mills have hiked their purchase prices, while large-scale mills are still maintaining their purchase prices at previous levels out of concerns that high outputs and large inventories still constitute high risks in the current market.
In addition, activity levels in China's scrap import market seem to have improved following the sharp fall of scrap prices in the international market. Currently, export quotations of H2 scrap from Japan are down to $290/mt CFR, while import prices of US HMS I/II 80:20 are now at $300/mt CFR. The decreased prices of imported scrap will likely result in more deals for imported scrap being concluded in China and will also make it much easier for Chinese mills to source scrap.