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Are Chinese Suppliers Offering Bulk Scrap Cargoes ?

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Melting Scrap

BigMint Bureau

459 Reads

27 May 2017, 17:21 IST

Are Chinese Suppliers Offering Bulk Scrap Cargoes ?

Ferrous scrap exports from China in the news highlights since past few weeks. With Chinese government laying stricter regulations on electric arc furnace steelmakers, indicates the possibility of increase in scrap exports from China in the coming time. The Chinese government's directive to eliminate scrap-fed induction melting furnaces in the country by June 30, led to a huge turnaround.

As per trade sources report to SteelMint, Chinese suppliers have been heard offering two bulk scrap cargoes to Pakistan. One vessel of nearly 15,000 MT and other of 20,000 MT. However ambiguity still persists among importers related to trade quality issues etc which has restricted them from finalising the deals.

"We have heard offers of two bulk scrap cargoes from Chinese suppliers of 15,000 MT and 20,000 MT. However deals are yet tob finalised over quality concerns. We have heard some Chinese suppliers doing under billing to evade the higher taxes ", shared a participant from steel mill based in Pakistan.

It is to be noted that there exists 40% export duty on Chinese ferrous scrap exports.

There were news about Japanese steel mills being offered Chinese scrap (lower quality) for trial however buyers remained cautious before booking Chinese scrap cargoes over quality and performance concerns. Japanese and South Korean steel mills generally prefer high quality cargoes thus Chinese scrap might be of less interest to them.

Global Ferrous scrap market : Week 22

1. Turkey: Turkey continues to actively book bulk ferrous scrap cargoes ahead of Ramadan festival. Recently bulk scrap trade of 68,000 MT was reported in Turkey at similar price levels against previous deals.

2. India: Imported scrap offers USD 295/MT, CFR India for Shredded and HMS - 1 at USD 275-280/MT from Europe, USD 280/MT from Middle East and USD 285/MT from South Africa. Indian scrap market has silent this week as buyers had booked around 8-10 bulk cargoes in past few weeks following which they are waiting for their vessels to arrive. The freight for containerized scrap continues to be on the higher side which has made the bulk cargoes preferable.

3. Pakistan: 3-4 bulk scrap cargoes were heard to be booked in past few weeks. Imported scrap offers USD 300/MT, CFR Pakistan for Shredded and HMS - 1 & 2 at USD 285-290/MT from Europe, USD 285-290/MT from Middle East.

4. Bangladesh: Imported scrap offers to Bangladesh are assessed at USD 320/MT, CFR for containerized cargoes and USD 305/MT, CFR for Shredded and USD 285/MT, CFR for HMS scrap. Sources shared that some PNS cargo was sold at USD 315/MT, CFR Bangladesh.