According to the statistics issued by the Inspection and Quarantine Bureau of the eastern Chinese port of Zhangjiagang, in the first five months of this year scrap imports via the port have slumped by 68 percent to 630,000 mt, with the total import value down 64 percent to $240 million.
According to analysts, two main factors are behind the noticeable decrease in scrap imports at Zhangjiagang. Firstly, the recovery of the global economy has triggered an increase in steel consumption, which in turn has resulting in a continuous rise of international scrap prices. Faced with higher import prices and the risks entailed by longer lead times, domestic buyers have started to show greater interest in purchasing scrap from domestic suppliers. Chinese mainstream domestic scrap prices are currently in a range of RMB 2,950-3,050/mt, 7-10 percent lower than import prices.
Secondly, China's macroeconomic control measures affecting the steel industry have exerted a downward impact on domestic steel prices and raw material costs, thus having a negative influence on scrap imports.