In the past week, demand for scrap improved first in most regions of China, bolstering local prices. However, the production curbs in Tangshan and the sharp decreases in iron ore prices negatively affected the scrap market, especially causing market players to be cautious. Meanwhile, prices for import scrap have declined due to the decreasing demand in China and unfavorable exchange rates.
Average domestic HMS scrap prices in China are at RMB 3,413/mt ($524.3/mt) ex-warehouse, increasing by RMB 80/mt ($12.3/mt) compared to March 3, 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 |
579.3 |
125 |
13.0 |
Liupanshui,Guizhou |
3,220 |
492.8 |
80 |
7.0 |
||
Nanchang,Jiangxi |
3,200 |
489.7 |
25 |
-1.5 |
||
Handan,Hebei |
3,655 |
559.4 |
105 |
10.1 |
||
Anyang,Henan |
3,460 |
529.5 |
150 |
17.4 |
||
Zhangjiagang,Jiangsu |
3,370 |
515.8 |
25 |
-1.8 |
||
Jinan,Shandong |
3,200 |
489.7 |
50 |
2.4 |
||
Average |
3,413 |
522.3 |
80 |
6.6 |
During the given week, most regions in China have resumed production gradually, increasing demand for scrap, exerting a positive impact on its prices. However, Tangshan has issued new production restriction policies during March 9-11 responding to a level 1 red alert, weakening the demand for scrap. At the same time, iron ore prices have moved down sharply recently, also negatively affecting scrap market players’ sentiments.
While most steelmakers needing to make scrap purchases have been focused on limited local purchases, the appetite for imports has slowed down. Market sources said that, following yesterday's drop in iron ore prices and fall in steel futures prices amid the fresh restrictions in Tangshan, demand for import scrap in China has also weakened together with bid prices. For now, the tradable value of Japanese HS scrap for Chinese customers is $490-495/mt CFR, down from $500-505/mt CFR late last week. Offers are still prevailing at $500/mt CFR, but buyers will insist on discounts. An additional reason for this is the recent depreciation of the Chinese currency, which has made imports less attractive for mills. The exchange rate has moved from $1 = RMB 6.4391 on February 10 to $1 = RMB 6.5102 on March 10.