Local Chinese scrap prices rise gradually, imports mostly still unattractive

Wednesday, 01 September 2021 17:36:04 (GMT+3)   |   Shanghai
       

Having faced certain signs of shortages in scrap supply domestically, Chinese steelmakers have decided to raise their purchase prices at once. Moreover, some Chinese steel mills have been encouraged to renew their feedstock inventories, anticipating the uptick in the manufacturing sector. Specifically, in September steel prices are likely to indicate rises as demand for steel traditionally improves during this traditional peak season.

Subsequently, average domestic HMS scrap prices in China have reached RMB 3,729/mt ($576.5/mt) ex-warehouse this week, up RMB 49/mt compared to August 25, according to SteelOrbis’ information. Even though for most China-based customers local scrap has continued to remain more attractive compared to scrap imports. Specifically, while the lowest offers from South Korean scrap suppliers have been heard at $540/mt CFR, Chinese steelmakers do not want to pay higher than $515-520/mt CFR. Meanwhile, Japanese suppliers are still not in a rush to lower their HS scrap offers to China, enjoying higher numbers in South Korea. Taking into account the bids from South Korea for ex-Japan material, any deals lower than $570-580/mt CFR China are out of the range of interest for Japanese suppliers. However, last week it was said that ex-Japan HS scrap could possibly be purchased at $560/mt CFR China.

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

Product name

Specification

Origin

Price
(RMB/mt)

Price
($/mt)

Weekly change
(RMB/mt)

Weekly change
($/mt)

HMS

scrap

> 6 mm

Tianjin

3,840

593.7

55

9.7

Liupanshui,Guizhou

3,740

578.2

45

8.1

Nanchang,Jiangxi

3,710

573.6

30

5.8

Handan,Hebei

3,890

601.4

0

1.2

Anyang,Henan

3,700

572.0

110

18.1

Zhangjiagang,Jiangsu

3,695

571.3

45

8.1

Jinan,Shandong

3,530

545.8

55

9.6

Average

3,729

576.6

49

8.7

$1 = RMB 6.468


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