In the given week, the production restrictions in Tangshan have negatively affected domestic scrap prices as some steelmakers have stopped buying. The mills still looking for scrap have been focusing fully on local purchases, as prices are more attractive than import prices. However, steelmakers’ improved profitability will stimulate production capacity utilization rates and may bolster scrap prices in China in the near future, sources told SteelOrbis.
Average domestic HMS scrap prices in China are at RMB 3,298/mt ($502/mt) ex-warehouse, decreasing by RMB 26/mt compared to March 24, 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 |
3,435 |
523.3 |
-25 |
-8.7 |
|
Liupanshui,Guizhou |
3,240 |
493.6 |
-10 |
-6.1 |
||
|
Nanchang,Jiangxi |
3,230 |
492.1 |
20 |
-1.5 |
||
|
Handan,Hebei |
3,410 |
519.5 |
-90 |
-18.6 |
||
|
Anyang,Henan |
3,370 |
513.4 |
-20 |
-7.8 |
||
|
Zhangjiagang,Jiangsu |
3,310 |
504.3 |
0 |
-4.7 |
||
|
Jinan,Shandong |
3,090 |
470.7 |
-60 |
-13.6 |
||
|
Average |
3,298 |
502.0 |
-26 |
-8.9 |
Due to the production restrictions in Tangshan, demand for scrap has been weak, while some traders are fearful as regards the future prospects for the market and have chosen to sell at lower prices. Inventory of scrap at steelmakers has indicated big rises, exerting a negative impact on prices. However, steelmakers’ profitability has improved, following gains in billet and rebar prices, stimulating their willingness to produce, which will provide support for scrap demand and bolster local scrap prices in the coming weeks.
The activity in the import scrap segment in China has been very low over the past week. The workable level for ex-Japan HS scrap has declined further - by $10/mt compared to last week to $455-460/mt CFR maximum. This may be the highest tradable level for now, according to sources, though most Chinese customers may ask for lower prices, for $445-455/mt CFR or so as they can buy scrap at such levels in the local market. The offers from Japan and other countries to China have been limited as transportation issues have persisted and many sellers have not been willing to discuss any discounts as they are waiting for a rebound in the Asian scrap market. Some higher bids have already been seen from other Asian customers, like Vietnam.
$1 = RMB 6.5713