Last month, steel scrap imports from Japan, China's largest supplier of ferrous scrap, increased by a similarly hefty 35% from July to 55,558 tonnes, with Japanese scrap accounting for around 83% of the total import volume, the data show.
The tonnage which cleared China Customs in August was mostly fulfilling orders in July, as several weeks are usually needed for import cargoes to arrive at Chinese ports, Mysteel Global noted.
Back in July, steel scrap recycling and processing activities in outdoor sorting yards in China had slowed as summer temperatures soared, leading to a decline in overall scrap supply in the domestic market. Consequently, some Chinese scrap consumers such as electric-furnace steelmakers chose to order ferrous scrap from foreign suppliers as a substitute, according to a Shanghai-based market watcher.
In parallel during July, Japanese steel scrap prices had been trending downward, due both to a supply surplus and to cooling buying interest from users in other countries, she added. The weakening of offer prices from Japanese exporters made it more acceptable for Chinese steelmakers to table orders.
For example, by the end of July, Japanese prices for HS scrap materials had fallen by $80/tonne on month to $390/t CFR China port. In contrast, also by end-July Shagang Group was paying Yuan 2,770-2,830/t ($391-399/t) for the domestically-produced HMS grade scrap including the delivery to its steelworks and the 13% VAT, according to the company's release.
Shagang Group, China's leading EAF steelmaker, is headquartered in East China's Jiangsu province.
Written by Sean Xie, xiepy@mysteel.com
Edited by Zhenqi Yang, yangzhenqi@mysteel.com
During the latest survey period, the five major finished steel products comprising rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate all posted on-week declines in their stocks.
Among the total, rebar stocks saw the steepest drop of 286,800 tonnes to 5.5 million tonnes, hitting the lowest so far this year, and wire rod stocks also fell to an 11-month low of 2.1 million tonnes, down by 149,200 tonnes on week.
"For now, many traders are still cautious about building up their stocks - they'd rather maintain their stocks at a reasonable level than replenish in large quantities," a Shanghai-based source said.
Meanwhile, Mysteel's survey among the 184 Chinese steel mills showed that the total output of the five steel items gained for the second week over December 9-15, up 0.2% or 21,800 tonnes on week to 9.09 million tonnes.
During the survey week, Chinese steel prices stayed largely stable, with the national price of HRB400E 20mm dia rebar under Mysteel's assessment, edging down by just Yuan 7/tonne ($1.1/t) on week to Yuan 4,840/t including the 13% VAT.
As of December 16, inventories of these five steel products under Mysteel's smaller-scale survey among trading houses in the 35 Chinese cities also recorded a 10-week dip with their volume down 5.5% or 529,500 tonnes on week to an 11-month low of 9.1 million tonnes.
Written by Rong Zhang, zhangronga@mysteel.com
Edited by Zhenqi Yang, yangzhenqi@mysteel.com
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