Local scrap prices in China still rise gradually, import bids still not good enough

Average scrap prices in the Chinese domestic market have moved on an uptrend in the past week. The pace of the increase has remained very gradual, but most market sources believe that the trend will continue. Nevertheless, bids for import scrap from China are still too low for suppliers.

Average domestic HMS scrap prices in China are at RMB 2,616/mt ex-warehouse, increasing by RMB 21/mt on average compared to previous week, according to SteelOrbis’ information.

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

On November 9, Jiangsu-based Shagang Group, China’s largest private steelmaker, raised its scrap purchase price by RMB 50/mt ($7/mt), signaling improved sentiments as regards the future prospects for the scrap market.       

Scrap supplies arriving in the market have increased, while consumption has not followed up, resulting in slight increases in inventory levels. Ferrous metal futures prices have moved up, exerting a positive impact on scrap prices. At the same time, steelmakers using electric furnaces have been more willing to use scrap for production amid improving profitability, bolstering prices to a certain degree.  

It is thought that scrap prices in the Chinese domestic market will likely edge up in the coming week.   

The latest tradable level for ex-Japan HS has settled at $370-375/mt CRR, only slightly above last week’s level of $370/mt CFR, while offers have been at $390/mt CFR at the lowest and most suppliers have been targeting $400/mt CFR.  

$1 = RMB 7.1752