Over the past week China's domestic scrap market continued to be boosted by the strong performance of the finished steel market. In addition, the country's scrap imports posted a month-on-month decline in June; deals for imported scrap in China face increasing difficulties due to the climbing prices in the international scrap market.
Product name | Specification | Place of origin | Price (RMB/mt) | Weekly change (RMB/mt) | Price ($/mt) | Weekly change ($/mt) |
HMS scrap | > 6 mm | Jiangsu | 2,750 | 50 | 403 | 7 |
Shandong | 2,650 | 120 | 388 | 18 |
China's domestic scrap prices maintained their rising trend throughout the past week. At present, mainstream quotations of heavy scrap in Jiangsu Province are in the range of RMB 2,700-2,750/mt ($395-403/mt) while the purchase prices of some mills in this province for shredded scrap are at RMB 2,800-2,850/mt ($410-417/mt) - marking an overall increase of RMB 50/mt ($7/mt) week on week. Meanwhile, the purchase prices of Hebei-based mills are in the range of RMB 2,550-2,600/mt ($373-381/mt), with the prices of heavy scrap staying at RMB 2,600-2,700/mt ($381-395/mt) in Guangdong Province.
Given the continuing strength of trading activities in the finished steel market and also the tight availability of scrap supplies, the Chinese scrap market has moved up steadily in recent days. With high expectations as regards the future trend, many market players have preferred to hold on to their stocks, and so the trading volume has failed to record a rise. Generally speaking, with prices still climbing in the construction steel market, China's domestic scrap market is expected to maintain its rising tendency in the future.
According to the latest statistics, China's scrap imports in June totaled 1.263 million mt, down 394,000 mt or 23.7 percent month on month, the first decrease since November 2008. In the January-June period, total scrap imports reached 7.577 million mt, up 6.139 million mt year on year.
Under the combined effects of ascending scrap prices in the international market and climbing shipping freight costs, import scrap prices in China have maintained their rising trend. At present, export quotations from the US for HMS I to China have reached $340-350/mt CFR, which makes it increasingly difficult to see deals for imported scrap concluded in China.