Diverse trends in local Chinese steel scrap market

During the week ending March 21, diverging price trends have been observed in the local steel scrap market in China, while transaction activity in the overall market has remained at medium levels. Average scrap prices in China's main markets are presented in the following table.

During the given week, both increases and decreases have been seen in prices in the local Chinese steel scrap market, while overall transaction activity has been at medium levels. In some regions of China, steelmakers' finished steel inventories have increased, while producers are also under pressure from tight liquidity, with both these factors contributing to the downward pressure on scrap prices. However, recent increases in domestic finished steel prices have provided a certain degree of support for steel scrap prices and so some traders are still upbeat on the prospects for the future trend of the scrap market in China. It is thought that scrap prices in the Chinese domestic market will likely move sideways in the coming week.