The Chinese domestic scrap market has weakened in the past week amid low transaction activity. Scrap inventory is at low levels, as most domestic scrap traders are not eager to restock in such a risky market. The profit margin of domestic scrap traders is currently in the range of $3-8/mt. Meanwhile, steel mills are cautious about purchasing scrap given recent weaknesses in finished steel prices. It is thought that scrap prices in China lack upward momentum and may decline in the medium or long term.
Scrap prices in local Chinese markets
Product name |
Specification |
Origin |
Price |
Price |
Weekly change |
HMS scrap |
> 6 mm |
Tianjin |
3,670 |
566 |
-50 |
Liupanshui |
3,620 |
559 |
0 |
||
Xinyu |
3,660 |
565 |
-100 |
||
Handan |
3,550 |
548 |
0 |
||
Nanchang |
3,720 |
574 |
-60 |
||
Anyang |
3,730 |
576 |
0 |
||
Average |
3,658 |
565 |
-35 |
Hot melting scrap (HMS) is reported at $566/mt in the Tianjin market, at $565/mt in the Xinyu market and at $574/mt in the Nanchang market. The average scrap price in China now stands at $565/mt, down $5.4/mt week on week.
Steel mills in China are under pressure from shortage of funds in line with their low sales volumes of finished products. There does not seem to be any support for a rebound in the Chinese scrap market in the short term. Some small mills with scrap delivery problems may try to attract supplies by raising their scrap purchase prices, but this is not expected to have an impact on the main scrap market trend. Traders also lack optimism on the future of the scrap market.