Some mills cut HMS buying prices but market stable in China

SteelOrbis Shanghai In recent days, scrap prices increased by a small margin in both the international and Chinese domestic markets. Although some mills have made changes to their heavy scrap purchasing prices based on their own particular situations, scrap prices remained steady overall across the market. Broken down into the various regions; in the Jiangsu market, after the price adjustment of Wuxi Xuefeng last month, this mill experienced certain difficulties in its production, resulting in a reduced demand for scrap. Consequently, the mill lowered its purchasing prices by RMB 30/mt ($4). Currently, Wuxi Xuefeng's price for HMS I of thickness greater than five mm is RMB 2,110/mt ($270), while its price for HMS II of thickness greater than four mm is RMB 2,060/mt ($264). Nevertheless, the purchasing price level of Shagang, which is the leading mill in Jiangsu Province, has been constant at RMB 2,010/mt for a long time now. In the northwest, commercial activity in Alashankou in Xinjiang Province has appeared quite sluggish during the past several months, with prices keeping steady at RMB 1,810/mt ($232). Scrap imports from Russia and other countries located to the west of China are mostly brought in through Alashankou. As the only railway port in western China, this town plays a very important role in China's scrap market. Scrap markets in eastern and southern China saw a similar price trend to that at Alashankou. The leading mills in these regions did not adjust their purchasing prices in any drastic way, and therefore the market performance remained stable. The purchasing price of heavy scrap from Shaoguan Steel is around RMB 2,050/mt. In conclusion, there are three main characteristics that can be seen in the current Chinese scrap market. 1. Prices in most regions have been steady for a long time. 2. Many leading mills have adopted a “wait-and-see” attitude. 3. The trading volume remains at a normal level. Generally speaking, China's leading mills won't change their purchasing prices for heavy scrap in the short term. Nevertheless, the price trend is likely to see some slight fluctuation.