Chinese Scrap Suppliers Hesitant Making Export Offers as Domestic Buying Improves

As per recent conversation with market participants SteelMint learned that, the scrap suppliers based in China are little hesitant towards placing fresh export offers to overseas buyers for scrap. Very few suppliers were really interested in offering scrap to buyers based in leading scrap importing countries from China.

China majorly exports its scrap to South-East Asian countries like Indonesia, Thailand, Vietnam, Taiwan and India.

Chinese scrap Suppliers were expecting greater profit margins from domestic scrap market as domestic scrap buying prices are continuously increasing in China.

Offers for Shredded scrap assessed at USD 330-340/MT, FOB China. Offers for LMS bundle scrap assessed at USD 245-250/MT, FOB China while offers for Busheling scrap were at USD 325-330/MT, FOB China.

A Chinese scrap trader recently sold around 2,000 MT Busheling Bundle to Indonesia at around USD 340/MT CFR. Notably, freight charges from China to South East Asian countries is USD 10-15/MT.

China's Shagang Steel raised domestic scrap buying bids further by USD 15/MT -

The largest ferrous scrap consuming steelmaker in China, Shagang Steel group has recently hiked its scrap buying prices by further by USD 15/MT (Chinese Yuan 100) in order to restock higher materials before the upcoming winter season. As per new price update on 27th Oct, Shagang is now paying Yuan 1,980/MT (USD 299) for HMS scrap not lesser than 6 MM in thickness delivered to its works in Jiangsu Province in China.

Notably, this was the third hike the company has undergone in the Oct'17 and the scrap purchase prices achieved are the highest since last three years. Earlier to this prices were lifted by CNY 60 on 21st Oct'17 from CNY 1820 to CNY 1880/MT.

Shagang steel has annual production capacity at 31.9 MnT iron, 39.2 MnT steel and 37.2 MnT rolled products. It manufactures leading steel products like wide heavy plate, hot-rolled strip coil, high-speed wire rod, large bundle of wire rod, ribbed steel bar, special steel round bar along with 60 series and more than 700 varieties with nearly 2000 specifications.

China is world's topmost scrap consumer, Since few months in this fiscal Chinese scrap industry is undergoing drastic changes. During Jan-Sept'17 scrap consumption level in steelmaking in China has crossed 100 MnT and domestic scrap consumption is increasing every next month in China.