After falling sharply in November, China’s steel prices have rebounded following the meeting of US President Donald Trump and Chinese President Xi Jinping during the G20 Summit held in Argentina last weekend, which has resulted in the postponement for a period of 90 days of the implementation of additional tariffs.
In the month of November, the rapid fall in Chinese steel export quotations had negatively affected global steel trade and caused buyers to postpone their purchases as they adopted a wait-and-see stance. Unsure of how long this situation would continue, steel mills had slowed down their scrap purchases due to the negative outlook as their finished steel sales had become very sluggish. As a result, the downward pressure on international scrap prices had increased.
The sharp price increases observed in the Chinese steel market at the beginning of the current week have given hope to the international markets. While some producers have withdrawn their semi-finished and finished steel offers shared last week in order to observe developments after Chinese exporters announced higher steel quotations, some mills have increased their prices.
In parallel with these developments, it is observed that some deep sea scrap suppliers have withdrawn their offers which were at $320-325/mt CFR Turkey last week. Last week, an ex-European offer to Turkey for HMS I/II 75:25 scrap was at $315/mt CFR. While no revival in Turkish mills’ demand for scrap has been observed yet, SteelOrbis has been informed that Turkish producers’ target prices are at around $300/mt CFR. However, they are expected to shape their strategy in relation to scrap purchases depending on the developments observed in their finished steel sales.