Local Chinese scrap prices up slightly, import bids also rise gradually

The uptrend in finished steel prices in China following previous downward corrections has bolstered local Chinese scrap prices. The main focus is still on local scrap purchases, but some bids for import scrap, especially in the north, are being given at higher levels.

Average domestic HMS scrap prices in China are at RMB 3,405/mt ($523/mt) ex-warehouse, increasing by RMB 11/mt compared to April 14, according to SteelOrbis’ information.

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

During the given week, Chinese steelmakers raised their scrap purchase prices to attract more supplies, resulting in slight rises in inventory levels. Following previous downward corrections, finished steel prices in China edged up again amid better sentiment among market players. Use of scrap in some regions may decrease due to environmental protection measures, while demand for scrap in other regions may improve.

Bids from China for import scrap have continued to rise during the past week, reaching $490-500/mt CFR. Last week, the tradable value was estimated at $485-495/mt CFR.

Early this week, most suppliers from Japan and South Korea were asking for $505-510/mt CFR for HS scrap and some sources said that a deal at $500/mt CFR had already been done, but this could not be confirmed by the time of publication. According to reports, though the market price has improved, there is still not strong demand coming from China and bids are not above $490/mt CFR in eastern China, while higher price levels up to $500/mt CFR are possible only for the northern part of the country.

On April 21, reports of further hikes of offers from Japan started to be heard. Japanese suppliers have increased offers by $5/mt to $510-515/mt CFR as they see strong demand for high grade scrap such as HS in the local Japanese market ahead of the Golden Week holiday starting on April 29.

$1 = RMB 6.5046