China’s domestic ferrous scrap prices are expected to remain flat in the near term with stable demand from the country’s Electric Arc Furnaces.
In the first week of June, Chinese finished steel prices rose while scrap inventories were on a decline. Mills resorted to buying domestic ferrous scrap which gave its prices a lift. Blast furnaces are currently operating at almost 85pc rate and both, production and consumption have gained momentum. Operations have turned profitable for most mills amid strong demand for finished steel.
Additionally, in the southern region of the country, a shortage of scrap due to rain-related processing and transportation difficulties has supported prices. Leading steel companies have increased purchase prices for steel scrap by CNY38-45/mt from last week.
These weather conditions have also hit trades for HRC and rebar as demand dropped.
In the eastern region, ferrous scrap prices rose not only on the back of supply crunch but also strong demand from steel mills. Steelmakers have hiked their purchase prices by CNY80/mt from the prior week. After the revision, Nangang Steel’s HMS scrap purchase price is at CNY2,610/mt del plant; Shagang Steel’s HMS scrap (10-20mm) purchase price is CNY2,690/mt del plant, Xingcheng special steel’s shear purchase price is at CNY2,680/mt del plant and Maanshan Iron & Steel’s heavy scrap purchase price is at CNY2,600/mt del plant.
In central China, steelmakers raised prices by CNY30/mt from the prior week. Angang Steel’s HMS scrap purchase price was at CNY2,580/mt, Wugang’s HMS scrap purchase price was CNY2,710/mt, Fangda steel’s HMS price was at CNY2,310/mt, while Shiheng Steel’s HMS purchase price is at CNY2,530/mt.
In southern China, Panchang Steel’s HMS purchase price was CNY2,550/mt, an increase of CNY120/mt from the prior week. Kunshan Steel’s HMS price was CNY2,700/mt delivered plant.
In the North, markets were slow and traders were reluctant to sell at the buyers’ prices. Taigang steel’s purchase price for HMS scrap was at CNY2,540/mt delivered plant.