Scrap prices in the Chinese domestic market remain relatively stable at the end of the month. In spite of a slight revival in the finished product segment, mills are in no rush to raise their bids not to heat up the market.
Just in the third week of July, steelmakers increased rebar offers by $20/t, stockists – by $10/t. Besides, there are rumours in the market that flat product prices are expected to grow by $20-30/t in early August.
However, steelmakers still estimate the current market conditions to be rather unstable and are not hurrying to lift their prices.
Chinese traders say the average market prices for HMS 1 remain within the range RMB 2,750-2,850/t ($405-420/t incl. VAT excl. delivery), like in the middle of the month.
Noteworthy, largest Chinese consumer of steel scrap Shagang cut its purchase prices again last week by RMB 30/t (about $5/t), to RMB 2,840-2,940/t ($418-433/t incl. VAT, excl. delivery). Local traders think although the correction was small, moves of the mill, whose bids are traditionally higher than the average market levels, should be considered as a warning to excessively optimistic market players.
Local scrap collectors say prices for the material will hardly rise in the short term and will fluctuate close to the current levels till mid-August.
The situation in the import scrap market is unchanged either. Despite slight reductions from the main suppliers (USA, Japan), prices for foreign scrap are uncompetitive in comparison with domestic material.
In particular, estimated prices for HMS 1 ex USA vary at $365/t c&f, which means $435/t cpt including 18% import duty and the average cost of delivery (-$5/t from two-week-ago figures). However, scrap prices to China may grow too as some regional buyers have become more active (30,000 tonnes of US scrap have been reportedly shipped to Vietnam at $376/t c&f).
Japanese exporters have also backed down: they have had to lower offers to South Korean customers after another correction in the domestic market, and estimated prices to Chinese buyers have also moved down as a result. At present, prices for Japanese HMS 2 shipped to China are about $345-350/t c&f ($420-425/t cpt).
(Source: www.metalexperts-group.com )