Higher steel prices support rebound in local and import scrap in China

The bottoming up of ferrous metal futures prices has provided solid support for scrap prices in China, with local scrap prices improving and bids for import scrap on the rise too.

Average domestic HMS scrap prices in China are at RMB 3,466/mt ($545.2/mt) ex-warehouse, increasing by RMB 24/mt compared to May 26, according to SteelOrbis’ information. 

Average scrap prices in China’s main markets are presented in the following table. 

At the beginning of the week in question, the decreasing trend in ferrous metal futures prices caused market players to panic and resulted in scrap being dumped at low prices. However, rebar futures prices have bottomed up since Friday last week, bolstering steel scrap prices. Bullish sentiments have prevailed among market players, exerting a positive impact on steel scrap prices. Though demand for steel is likely to slacken during the traditional offseason in the near future, it is expected scrap prices in China may edge up further in the coming week. 

The recent rebound in steel prices in China has pushed up bids for import HS scrap in the country as well. Some customers have been ready to buy at $510-520/mt CFR in northern China, while in the eastern part of the country bids have also improved, by around $10-15/mt from last week to $500-505/mt CFR. This means that the general tradable price level for HS in China has gone up by $10-15/mt over the past week to $500-515/mt CFR. Nevertheless, the trading activity has been poor as Japanese suppliers have been asking for $540/mt CFR China minimum.

$1 = RMB 6.3773