Fewer domestic scrap supplies arriving in the spot market in China have encouraged Chinese steelmakers to increase their scrap purchase prices further. Nevertheless, imports have remained entirely unattractive, with the gap between offers and bids being barely lower than $70/mt. Specifically, while import scrap offers have reached $590-600/mt CFR, Chinese customers are said to be reluctant to purchase material at higher than $520-530/mt CFR. “I have stopped looking at raw material imports now because prices in China do not work. The basic focus today is on billet,” a key China-based trader commented.
Accordingly, domestic HMS scrap prices in China are at RMB 3,659/mt ex-warehouse, increasing by RMB 28/mt compared to July 7, according to SteelOrbis’ information.
Average scrap prices in China’s main markets are presented in the following table.
|
Product name |
Specification |
Origin |
Price |
Price |
Weekly change |
Weekly change |
|
HMS |
> 6 mm |
Tianjin |
3,760 |
580.6 |
0 |
-1.3 |
|
Liupanshui,Guizhou |
3,660 |
565.2 |
90 |
12.6 |
||
|
Nanchang,Jiangxi |
3,570 |
551.3 |
0 |
-1.3 |
||
|
Handan,Hebei |
3,800 |
586.8 |
10 |
0.2 |
||
|
Anyang,Henan |
3,645 |
562.8 |
25 |
2.6 |
||
|
Zhangjiagang,Jiangsu |
3,710 |
572.9 |
30 |
3.3 |
||
|
Jinan,Shandong |
3,470 |
535.8 |
40 |
4.9 |
||
|
Average |
3,659 |
565.1 |
28 |
3.0 |
During the given week, transaction activities from downstream users in China have slowed down due to high temperatures and the rainy season, exerting a negative impact on the scrap market. However, higher rebar futures seen in the middle of the given week and tighter supply caused by weather conditions have ultimately bolstered local scrap prices. Overall, scrap prices are expected to move up further in the coming week, with support coming from the reduction of the required reserve ratio effective as of July 15, which the People’s Bank of China (PBC) has announced.
$1 = RMB 6.4806