Scrap prices in China move sideways, imports unworkable

Scrap prices in the Chinese domestic market have fluctuated within a limited range within the past week. Consequently, the preference of Chinese customers to buy feedstock domestically instead of purchasing imports has remained unchanged. “China’s price still does not work for any exporter,” a representative of a Chinese steel mill stated. Specifically, while Japanese scrap sellers are collecting bids from South Korean customers at $506/mt FOB, Chinese customers are still seeking to pay $510/mt CFR at the highest for import scrap. Overall, demand for scrap has weakened slightly this week with the Chinese New Year holiday approaching. Specifically, while some EAF-based steel mills have already slowed down their production, others are set to leave the market in the coming week. Moreover, the worsening of the Covid-19 pandemic in many regions of China has negatively affected transportation. In the coming week, scrap prices are expected to move down.
On balance, average domestic HMS scrap prices in China are at RMB 3,619/mt ($569.8/mt) ex-warehouse, increasing by RMB 7/mt compared to January 12, according to SteelOrbis’ information.
Average scrap prices in China’s main markets are presented in the following table.

$1 = RMB 6.3624