In the past week China's scrap market has varied between stability and increase against the background of the recovery of prices seen in the domestic steel market. With some mills increasing their scrap purchase prices slightly, some traders have started to halt their sales. Meanwhile, the domestic steel market is thought to be still facing considerable downward pressure.
Product name | Specification | Place of origin | Price (RMB/mt) | Weekly change (RMB/mt) | Price ($/mt) | Weekly change ($/mt) |
HMS scrap | > 6 mm | Jiangsu | 2,900 | 20 | 428 | 3 |
Shandong | 2,850 | - | 420 | - |
Current mainstream quotations of heavy scrap in Jiangsu Province stand at the level of RMB 2,820-2,880/mt ($416-425/mt), while the purchase prices in this province for shredded scrap are at RMB 2,920-2,950/mt ($431-435/mt), with the lower ends both up RMB 20/mt ($3/mt) week on week. In Hebei Province, mainstream purchase prices of steel mills for heavy scrap are at RMB 2,850-2,900/mt ($420-428/mt), remaining neutral week on week. Meanwhile, market prices of heavy scrap in the northeastern region are standing at RMB 2,800-2,950/mt ($413-435/mt), unchanged week on week, with scrap prices in Hubei Province standing at RMB 2,850-2,900/mt ($421-428/mt), also unchanged week on week.
Due to the small increases observed in China's scrap market, scrap traders have become more reluctant to sell their materials for the time being. The price increases in the steel market, such as increases of RMB 200/mt ($29/mt) in products including rebar and hot rolled coil (HRC), have exerted an influence on the scrap market. After the price increase in the steel market, some medium- and small-sized mills have started to slightly increase their scrap purchase prices, particularly in the eastern region of China. In the northern region, the uptrend in the regional scrap market has also been partly due to the tightness of scrap supply. It is thought that the future trend of local scrap prices will greatly depend on the movements in the domestic steel market.
In the past week, quotations of overseas scrap have generally remained neutral. At present, quotations of ex-US scrap to China have remained at $375-380/mt CFR. Since the scrap price in the US domestic market is still on an upward track, it is expected that offers of ex-US scrap to China will continue to climb in the near term. At the same time, ex-Japan H2 scrap offers to China have remained at $350/mt CFR.