Local Chinese steel scrap prices mostly edge upwards

During the week ending June 25, steel scrap prices in the Chinese domestic market have mostly edge upwards, while transaction activity in the overall market has been at low-to-medium levels. Average scrap prices in China’s main markets are presented in the following table.

During the given week, Chinese steelmakers have only purchased scrap in line with their needs, while the scrap inventories of major domestic steelmakers have declined slightly. Due to the rises seen in iron ore prices, steelmakers’ profit margins have shrunk, which has also negatively affected demand for scrap. However, the rebounds seen in rebar and HRC futures prices at Shanghai Futures Exchange (SHFE) will likely provide some support for scrap prices. Meanwhile, due to anticipated decreases in scrap collection and processing during the hot weather, scrap prices will gain some support. It is thought that scrap prices in the Chinese domestic market will likely fluctuate within a limited range in the coming week.

All prices are ex-warehouse and include 13 percent VAT.

$1 = RMB 6.88