Local Chinese scrap prices rise amid stronger demand, import prices hit $500/mt CFR

Though demand for scrap has not yet recovered to normal level in China, bullish sentiments have prevailed among market players due to rises in finished steel prices and iron ore prices. Meanwhile, prices for import scrap have continued to rise in deals and market sources believe prices have not reached their peak.

Average domestic HMS scrap prices in China are at RMB 3,333/mt ($516.2/mt) ex-warehouse, increasing by RMB 108/mt ($16.7/mt) compared to February 24, according to SteelOrbis’ information. 

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

During the given week, inventory of scrap has been at relatively low levels, bolstering prices. Meanwhile, the improved demand in the finished steel market and the high levels of iron ore prices have also exerted a positive impact on scrap prices. At the same time, there has been limited supply of scrap in the spot market. However, demand for scrap has not yet recovered to decent levels, indicating that scrap prices may have space for further rises in the following period in March.

The SteelOrbis reference price for import HS scrap to China has increased by a further $5-10/mt compared to the level reported on Tuesday, March 2, reaching $500/mt CFR. A deal for ex-Japan HS has been rumored in the market, while most offers are coming to China at not below $510/mt CFR at the moment, according to sources. The previous contract from Japan was at $490/mt CFR.

A deal for 3,000 mt of ex-South Korea P&S scrap was heard at $495-500/mt CFR, as SteelOrbis reported earlier.