China's domestic scrap market has in general fluctuated upwards during the past week, with a significant increase observed in eastern China caused by shortage of supplies and increased purchase prices. The output of steel mills in China has recently increased to some extent, and so demand for scrap has also risen.
Product name | Specification | Place of origin | Price (RMB/mt) | Weekly change (RMB/mt) | Price ($/mt) | Weekly change ($/mt) |
HMS scrap | > 6 mm | Jiangsu | 3,030 | 50 | 446 | 7 |
Shandong | 2,850 | - | 420 | - |
Scrap prices have soared in eastern China over the past week. Current mainstream quotations of heavy scrap in Jiangsu Province are at RMB 2,950-3,000/mt ($434-442/mt) while the purchase prices in this province for cut grade scrap are at RMB 3,030-3,080/mt ($446-454/mt), up RMB 50/mt ($7/mt) week on week. In Hebei Province, mainstream purchase prices of steel mills for heavy scrap are at RMB 2,900-2,970/mt ($428-438/mt), while market prices for heavy scrap in northeastern China are at RMB 2,900-3,050/mt ($427-449/mt), up by RMB 50/mt ($7/mt). Meanwhile, scrap prices in Hubei Province are at RMB 2,850-2,900/mt ($421-428/mt), unchanged week on week.
The main reasons for the increased scrap prices in Jiangsu Province are tight supply and the price adjustments of the major mills. In recent days in eastern China, scrap supplies have declined due to the hot weather. In addition, domestic steelmaker Shagang Group, based in Jiangsu Province, decided to make a significant increase to its scrap purchase price, with its example being followed by other mills.
Due to the rebound observed in domestic prices of finished steel since July, steel production capacity utilization rates which had previously been reduced have been increased again to a certain extent and so demand for raw materials such as scrap has also risen. On the other hand, China's imported scrap volume has continued to shrink in the past several months, exacerbating the scarcity of scrap supplies.
Meanwhile, China's scrap import market has continued to be characterized by stagnation. Offers from overseas have maintained their upward trend, with ex-US shredded scrap offered to China standing at $420-430/mt CFR, with such import prices currently much higher than domestic scrap prices. In addition, current quotations of H2 scrap from Japan to China are at the level of $370-380/mt CFR.