Local scrap prices in China keep rising rapidly amid limited supply, imports halted

The rising trends of finished steel prices and ferrous metal futures prices in China seen since last week have exerted a positive impact on scrap prices in China. As a result, local and import prices have added $10-25/mt on average, alsosupported by limited allocation in the local market, especially in the northern part of China.

The tradable price level for imported HS scrap for Chinese steelmakers has continued to increase at a high pace, reaching $460-480/mt CFR, up by $10-20/mt since the previous week. But imports are still halted due to the very big gap between offers and bids. Japanese suppliers have been offering at $560/mt CFR and above.

Average domestic HMS scrap prices in China are at RMB 3,405/mt ($534.7/mt) ex-warehouse, increasing by RMB 140/mt compared to December 1, according to SteelOrbis’ information.

The local scrap prices have continued their uptrend amid the decreasing volume of scrap arriving in the spot market and the rising trends of steel prices and ferrous metal futures prices. Demand for scrap has improved, resulting in mills’ willingness to conclude purchases of scrap. The shortage of scrap supply is expected to persist for some time and it will bolster prices to some extent in the coming week.

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

$1 = RMB 6.3677