According to a number of market sources, the first cargo of ex-US shredded scrap is rumored to have been sold to China at $430/mt CFR this week. Though the details and the confirmation of the contract have not been received by SteelOrbis by the time of publication, most sources said that the deal has actually been done - by bulk for 30,000 mt or less. “This is a good price for both parties,” one of the traders said, adding that the gap between shredded scrap and HS (similar to P&S) has increased.
After scrap prices decreased in the local Japanese market and amid falling bids from South Korea and Vietnam, the tradable price level for ex-Japan HS scrap to China has dropped to $445-455/mt CFR, though just early this week suppliers were insisting on $470/mt CFR. Last week, one deal was reportedly done at $470-475/mt CFR from Japan to China. As SteelOrbis reported last week, most offers have been coming at $485/mt CFR for Japanese HS scrap, while the pace of the price drop has gathered momentum this week.
A negative trend has been seen in the local Chinese market as well, but prices have been going down gradually. After Jiangsu-based Shagang Group, China’s largest private steelmaker, cut in its scrap purchase price by RMB 30/mt (4.6/mt) as of January 25, the expectations for the Chinese domestic scrap market has become gloomy.
Average domestic HMS scrap prices in China are at RMB 3,145/mt ($486/mt) ex-warehouse, decreasing by RMB 6/mt ($0.9/mt) compared to January 20, according to SteelOrbis’ information.
Average scrap prices in China’s main markets are presented in the following table.
|
Product name |
Specification |
Origin |
Price |
Price |
Weekly change |
Weekly change |
|
HMS |
> 6 mm |
Tianjin |
3,345 |
515.8 |
0 |
0.2 |
|
Liupanshui, Guizhou |
3,040 |
468.8 |
0 |
0.2 |
||
|
Nanchang, Jiangxi |
3,040 |
468.8 |
0 |
0.2 |
||
|
Handan, Hebei |
3,280 |
505.8 |
20 |
3.3 |
||
|
Anyang, Henan |
3,150 |
485.7 |
0 |
0.2 |
||
|
Zhangjiagang, Jiangsu |
3,190 |
491.9 |
-10 |
-1.3 |
||
|
Jinan, Shandong |
2,970 |
458.0 |
-50 |
-7.5 |
||
|
Average |
3,145 |
485.0 |
-6 |
-0.7 |
During the given week, most Chinese steelmakers have completed scrap stock replenishments for the winter season, while steel prices have indicated some declines, reducing steelmakers’ profitability. Some steelmakers have implemented maintenance works for blast furnaces and electric furnaces, making preparations for business in the coming year. Recently, the worsening Covid-19 pandemic in China has negatively affected the circulation of scrap, while scrap processing enterprises have been unwilling to build up stocks amid the high levels of scrap prices. It is thought that scrap prices in China will likely edge down in the coming week.
$1 = RMB 6.4665