Over the past week the Chinese scrap market failed to show signs of halting its decrease in the various regions. Given the fall of finished steel prices, domestic mills had to lower their purchase prices in order to curb their production costs. In addition, the relatively low international scrap prices continue to have a certain impact on the Chinese market.
Product name |
Specification |
Place of origin |
Price (RMB/mt) |
Weekly change (RMB/mt) |
Price ($/mt) |
Weekly change ($/mt) |
HMS scrap |
> 6 mm |
Jiangsu |
2,330 |
-170 |
341 |
-25 |
Shandong |
2,350 |
- |
344 |
- |
During the past week the Chinese scrap market again slipped down in a context of bearish demand and declining international scrap prices. At present, mainstream quotations of heavy scrap in Jiangsu Province are down to RMB 2,300-2,350/mt ($337-344/mt), while the purchase prices of some mills in this province for shredded scrap have declined to RMB 2,450/mt ($359/mt), with the purchase prices of heavy scrap in Hebei Province standing around RMB 2,450-2,500/mt ($359-366/mt).
Considering the slack finished steel market, mills have had to curb production costs by lowering their purchase prices. At present, rebar prices in Shanghai are down to RMB 3,250/mt ($476/mt) on theoretical weight basis; meanwhile, market quotations of 4.75-11.5 mm hot rolled coils have fallen to the level of RMB 3,280/mt ($480/mt). As a result, the mills have come under great pressure to reduce costs in recent days and are likely to further slash their prices for raw materials.
In addition, the successive arrivals of large volumes of imported scrap for February have also had a great impact on the domestic scrap market. In recent days, the international scrap market has continued to drop, with a remarkable decrease recorded in both the US and Japanese markets. The purchase prices of Japanese mills for scrap have declined to Yen 16,500-17,000/mt ($167-172/mt), while on the US East Coast, busheling scrap prices are currently in a range of $197-207/mt, with shredded scrap sold at $187-197/mt and HMS I offered at around $162-172/mt. As a result, some Chinese mills have begun to use imported scrap in large quantities.
Looking at the current situation, China's domestic scrap market looks set to remain on its sliding trend in the short term under the influence of the continuing sluggishness in the finished steel market.