Posted on 22 Aug 2023
China's total imports of ferrous scrap dropped for a third month in July, falling by a significant 12.4% from June to 31,758 tonnes, according to the country's General Administration of Customs (GACC). The substantial spread between the prices of domestic and imported steel scrap discouraged Chinese users from buying scrap from overseas, Mysteel Global noted.
Among the total, imports from Japan, China's top steel scrap supplier, also fell by a marked 13.6% on month to 17,175 tonnes in July, with the volume accounting for around 54.1% of the country's total scrap imports, the data showed.
"The cost effectiveness of imported materials remained weak for Chinese steelmakers, even though domestic scrap prices had risen steadily in July," a market analyst based in Shanghai observed. "The mills' interest in importing scrap showed no sign of recovery last month," she commented.
During July 3-31, Mysteel's assessment of spot transaction prices of 6-8mm common-grade steel scrap in Zhangjiagang in East China's Jiangsu province averaged Yuan 2,567/tonne ($355/t), while during the same period prices for Japan-origin HS scrap averaged Yuan 414.6/t, both excluding the 13% VAT.
On the other hand, steel scrap demand among Chinese steelmakers strengthened in the second half of last month, when the mills saw their margins improve with the rise in finished steel prices, Mysteel Global noted.
Over July 21-27, steel scrap consumption among the 211 Chinese integrated and electric-arc-furnace steelmakers under Mysteel's survey totalled 2.7 million tonnes, higher by a significant 25% compared with the last week of June.
Under such circumstances, the steel mills had to source more scrap materials from domestic dealers, causing the stocks in the scrapyards to draw lower, Mysteel's other survey showed.
By the end of July, the total inventories of processed and unprocessed steel scrap held by China's 584 licensed steel scrapyards stood at some 1.14 million tonnes, lower by 3.4% on month, according to Mysteel's tracking.
Source:Mysteel Global
