Under the scope of restrictions on crude steel production declared by China’s authorities, demand for scrap in China has continued to slacken, minimizing the support to the prices. With the ongoing developments, China has remained less attractive market for foreign scrap suppliers. Specifically, despite both bids and offers have risen by around $10/mt within the past week, trading activity in the import market in China has remained constrained by the divergence of interests between suppliers and buyers. While Chinese customers are said hardly to accept $540-550/mt CFR for import scrap, Japan-based sellers, for instance, are reluctant to sell material at lower than $590-610/mt CFR.
Meanwhile, average domestic HMS scrap prices in China are at RMB 3,684/mt ($567.4/mt) ex-warehouse, decreasing by RMB 27/mt compared to July 21, 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 |
3,730 |
576.2 |
-55 |
-7.3 |
|
Liupanshui,Guizhou |
3,660 |
565.4 |
0 |
1.1 |
||
|
Nanchang,Jiangxi |
3,660 |
565.4 |
-35 |
-4.3 |
||
|
Handan,Hebei |
3,800 |
587.1 |
-15 |
-1.1 |
||
|
Anyang,Henan |
3,735 |
577.0 |
0 |
1.2 |
||
|
Zhangjiagang,Jiangsu |
3,760 |
580.9 |
-25 |
-2.7 |
||
|
Jinan,Shandong |
3,440 |
531.4 |
-60 |
-8.2 |
||
|
Average |
3,684 |
569.1 |
-27 |
-3.0 |
Rebar futures prices’ rise in China, seen at the beginning of the given week has bolstered scrap prices, in particular. However, subsequent heavy rains, flood and typhoon have softened the demand for scrap, dragging the prices down. Moreover, the demand from downstream steelmakers is expected to be sluggish in the coming week, exerting a negative impact on scrap market further. Consequently, local scrap prices in the Chinese market are likely to move sideways in the coming week.
$1 = RMB 6.4929