Local scrap prices in China move up, but no demand for import material yet

Following a recent rise in futures prices in China, sentiments in the scrap segment have changed. Specifically, with certain signs of improvement in demand for rebar and wire rod from downstream users, Chinese steelmakers have revised their scrap purchase prices in order to secure feedstock in time. The impact from Typhoon Muifa may be not so apparent with regard to scrap prices, though steel demand may decline slightly. Hence, with inventories of scrap being comparatively low in China now, prices are expected to move up further in the coming week. Meanwhile, Japanese scrap suppliers may be more accommodating towards Chinese customers these days due to the decline in buying interest from South Korean buyers given the recent flooding in their country. However, foor now, the quotations for ex-Japan HS scrap to China have continued to be voiced mostly at $430-440/mt CFR, moving sideways from the previous week. In the meantime, Chinese customers are seeking to pay not higher than $400/mt CFR for import material.

Average domestic HMS scrap prices in China are at RMB 2,824/mt ex-warehouse, moving up by RMB 44/mt compared to September 7, according to SteelOrbis’ information.

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

$1 = RMB 6.9116