The commitment to reduce China’s crude steel output ahead of the 2022 Beijing Winter Olympics and Paralympics declared recently by the Chinese government has affected the domestic scrap market. Specifically, most Chinese scrap buyers have been consequently encouraged to lower their bids, both for overseas and local scrap, with the latter having remained more attractive for bookings. Buying activity in the import segment has remained at a standstill, with bids for ex-Japan HS scrap from Chinese buyers voiced at $500/mt CFR, against offers at $590/mt CFR, both down around $10/mt within the past week.
In the meantime, average domestic HMS scrap prices in China are at RMB 3,686/mt ($568.6/mt) ex-warehouse, decreasing by RMB 9/mt compared to August 4, 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 |
3,820 |
589.1 |
0 |
-2.1 |
|
Liupanshui,Guizhou |
3,630 |
559.8 |
25 |
1.9 |
||
|
Nanchang,Jiangxi |
3,670 |
566.0 |
20 |
1.1 |
||
|
Handan,Hebei |
3,850 |
593.8 |
35 |
3.3 |
||
|
Anyang,Henan |
3,680 |
567.6 |
-55 |
-10.5 |
||
|
Zhangjiagang,Jiangsu |
3,680 |
567.6 |
-60 |
-11.3 |
||
|
Jinan,Shandong |
3,475 |
535.9 |
-25 |
-5.8 |
||
|
Average |
3,686 |
568.5 |
-9 |
-3.4 |
During the given week, bearish sentiments in the finished steel segment in China and, concurrently, the declared cuts in steel output have exerted a negative impact on scrap prices. Local steelmakers in China have continued to meet their urgent needs locally amid the greater attractiveness of prices. It is not excluded that the deterioration of Covid-19 situation in China and the transportation restrictions arising from it may provide some support for scrap prices in coming weeks.
$1 = RMB 6.4831