Scrap prices in the Chinese domestic market have moved down amid Shagang Group’s cutting its scrap purchase prices by RMB 50/mt ($7.5/mt) in two steps on August 19 and August 20. At the same time, the import scrap prices in China have been on the rise since last week. One deal at a higher price level was fixed last week, but since offers from Japan have continued their uptrend, which is conflicting with the local market, the import scrap activity has faded away again.
Last week, 3,000 mt of ex-Japan HS scrap were traded to the major Chinese steel producer at $400-405/mt CFR, while the previous tradable level was at $390/mt CFR on average and definitely not above $400/mt CFR. However, from early this week, offers for ex-Japan HS scrap have increased to $415-425/mt CFR China, which is not acceptable for buyers. At the same time, these offers have been based on the latest bid Japanese suppliers have received from the major South Korean importer Hyundai Steel at JPY 52,000/mt ($380/mt) FOB for HS this week, so they will not be interested in cutting prices from that level to Chinese customers.
Average domestic HMS scrap prices in China are at RMB 2,795/mt ex-warehouse, moving down by RMB 34/mt compared to August 17, 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 |
2,860 |
417.4 |
20 |
-1.9 |
|
Liupanshui,Guizhou |
2,730 |
398.4 |
-80 |
-16.5 |
||
|
Nanchang,Jiangxi |
2,810 |
410.1 |
-20 |
-7.7 |
||
|
Handan,Hebei |
2,830 |
413.0 |
0 |
-4.8 |
||
|
Anyang,Henan |
2,735 |
399.2 |
-70 |
-15.0 |
||
|
Zhangjiagang,Jiangsu |
2,840 |
414.5 |
10 |
-3.4 |
||
|
Jinan,Shandong |
2,760 |
402.8 |
-100 |
-19.5 |
||
|
Average |
2,795 |
407.9 |
-34 |
-9.8 |
||
|
Note: Prices include 3 percent VAT as of March 1 2022. |
||||||
During the given week, Jiangsu-based Shagang Group, China’s largest private steelmaker decreased its scrap purchase prices by RMB 50/mt ($7.5/mt) in two steps on August 19 and August 20, which weakened the support to scrap market, signaling its cautious sentiments for the scrap market prospects.
The previous quick rises in scrap prices gave room for declines. Raw material prices moved up faster than finished steel, shrinking steelmakers’ profitability, thereby they preferred to hold relatively low inventory levels. The continuous high temperature exerted a negative impact on construction activities, which slackened the demand for steel. It is thought that scrap prices in the Chinese domestic market will likely fluctuate within a limited range in the coming week.
$1 = RMB 6.8388