Major Chinese steelmaker Shagang Group has been cutting its scrap purchase prices almost every day since early last week amid the downtrends in ferrous metal futures prices and local steel prices. This reflects the rapid decline in the local scrap market, which has caused scrap imports to grind to a halt recently with bid prices falling.
Average domestic HMS scrap prices in China are at RMB 3,442/mt ($535.5/mt) ex-warehouse, decreasing by RMB 363/mt compared to May 19, 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 |
3,785 |
588.8 |
-215 |
-32.7 |
|
Liupanshui,Guizhou |
3,040 |
472.9 |
-520 |
-80.2 |
||
|
Nanchang,Jiangxi |
3,370 |
524.3 |
-430 |
-66.2 |
||
|
Handan,Hebei |
3,645 |
567.1 |
-280 |
-42.8 |
||
|
Anyang,Henan |
3,515 |
546.8 |
-315 |
-48.3 |
||
|
Zhangjiagang,Jiangsu |
3,435 |
534.4 |
-415 |
-63.8 |
||
|
Jinan,Shandong |
3,305 |
514.2 |
-365 |
-56.1 |
||
|
Average |
3,442 |
535.5 |
-363 |
-55.7 |
In the given week, sharp decreases in finished steel prices have dragged down scrap prices, and the downtrend in ferrous metal futures prices has also weakened the support for scrap prices.
At the same time, the rainy season is approaching in eastern China, which will cause demand for rebar and scrap to slacken. The average local rebar price in China has lost RMB 130/mt ($20/mt) today, May 26, and RMB 640/mt ($100/mt) over the past week, coming to RMB 4,977/mt ($776/mt) ex-warehouse, according to SteelOrbis’ data.
Following the sharp drop in the local market, the tradable level for import HS scrap has declined to $490-500/mt CFR, with the lower end of the range corresponding to the maximum bids in the eastern part of the country. Prices in the import market have lost $20-30/mt over the past week from $510-530/mt CFR, reported on May 19.
$1 = RMB 6.4099