Local Chinese scrap prices start to rise, import prices up again slightly

Following the Chinese New Year holiday, Chinese steelmakers have gradually resumed purchases of scrap, exerting a positive impact on scrap prices. Meanwhile, ferrous metal futures prices in China have moved up, also bolstering the scrap market. In addition, offers of import scrap from Japan and other countries have increased further amid the rising trend in the global scrap market and some slight increase in bids from Chinese buyers.

Average domestic HMS scrap prices in China are at RMB 3,225/mt ($499/mt) ex-warehouse, increasing by RMB 95/mt ($15/mt) compared to February 3, according to SteelOrbis’ information. 

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

Last week, market participants were off for the Chinese New Year holiday. Meanwhile, inventory of scrap has risen and will continue to increase. However, ferrous metal futures prices in China have moved up, exerting a positive impact on steel prices, which bolstered scrap prices after the holiday.

Demand for import scrap has still been seen for only small volumes. Many customers have preferred to buy import billet rather than scrap as the import system has not been tested over a long time and supplies of different grades of scrap may face some issues at customs. The main focus of Chinese buyers is still on ex-Japan HS scrap.

Ex-Japan scrap prices have increased each day following the Chinese New Year holiday amid the improved demand from users in China. It is heard that Japanese suppliers have received some bids for HS from China at $480/mt CFR this week, up by around 10/mt from the late last week’s tradable price level, with some small-volume contracts being signed at $470-480/mt CFR, according to sources.

Ex-EU P&S scrap was sold at $470/mt CFR China last week, as SteelOrbis reported earlier. This week, most suppliers from South America, the EU, Singapore and Japan have been asking for $480-500/mt CFR China.  

$1 = RMB 6.4615