Billet prices have indicated big declines, exerting a negative impact on finished steel prices and scrap prices in China early this week. However, sentiment has already changed and good demand in the peak season for business is expected to bolster both domestic and import scrap prices.
Average domestic HMS scrap prices in China are at RMB 3,394/mt ($519/mt) ex-warehouse, decreasing by RMB 7/mt compared to April 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 |
3,620 |
553.1 |
-40 |
-5.4 |
|
Liupanshui,Guizhou |
3,300 |
504.2 |
-10 |
-0.9 |
||
|
Nanchang,Jiangxi |
3,320 |
507.3 |
20 |
3.7 |
||
|
Handan,Hebei |
3,475 |
530.9 |
10 |
2.2 |
||
|
Anyang,Henan |
3,450 |
527.1 |
-20 |
-2.4 |
||
|
Zhangjiagang,Jiangsu |
3,390 |
518.0 |
30 |
5.2 |
||
|
Jinan,Shandong |
3,200 |
488.9 |
-40 |
-5.5 |
||
|
Average |
3,394 |
518.5 |
-7 |
-0.5 |
During the given week, billet prices indicated strong declines last weekend and expected new capacity replacement plans have been exerting a negative impact on scrap prices.
Nevertheless, Jiangsu-based Shagang Group announced that as of April 10 it has raised its scrap purchase prices by RMB 80-100/mt ($12.2-15.3/mt), signaling its bullish view of the future prospects for the market. Buyers have been slow in their purchasing activities for scrap so far, but the good demand in the traditional peak season and the better liquidity in the global market will bolster scrap prices in the near future.
The price increase has already started in the import segment in China and the gap between offers and bids has been narrowing. Offers for HS scrap from some Japanese scrap suppliers have increased to $505-510/mt CFR to China this week, according to sources. Good sentiments in the local and export markets have supported suppliers, though small discounts are still possible for Chinese buyers.
Bids for HS in China have also improved from mainly $465-470/mt CFR last week to $480-485/mt CFR, while some customers have even been ready to accept $490-495/mt CFR, SteelOrbis has learned.
Demand for HS scrap from Southeast Asia is expected to continue and Japanese exporters may agree to sell at $490-500/mt CFR to Vietnam.
As a result, the workable level for import HS scrap in China has added $15/mt over the past week to $485-495/mt CFR.
$1 = RMB 6.5362