China’s Q1 steel scrap exports slide nearly 99% YoY
Beijing’s imposition of the hefty 40% export tax is still seen as preventing China’s ferrous scrap exports from seeing any notable rises longer term, a steel scrap market insider explained Tuesday. Besides, domestic scrap prices were generally high in March – certainly compared with international levels – while demand that month had yet to recover. “Steel scrap exports are unlikely to see any remarkable increase in the coming months of this year,” she added.
China’s domestic steel scrap market has been in continuous downward adjustment over the past month, with Mysteel’s steel scrap price index still remaining firm at Yuan 2,493.9/tonne ($366.8/t) on delivery and including the 16% VAT as of March 29, despite a fall of Yuan 61.3/t or 2.4% on month, according to Mysteel’s data base. The decrease is mainly due to softer demand amid increased availability of scrap supplies.
As of March 28, the total of steel scrap stockpiled by the 61 steelmakers Mysteel monitors and which operate both blast furnaces and electric-are-furnace (EAFs) swelled by some 276,000 tonnes or 9.3% on month to hit 2.98 million tonnes. The stocks could last the steel mills for 15.2 days, or 1.4 days longer than the previous month, according to Mysteel’s latest survey published on March 29.
Traditionally, last month and this – known in Chinese steel circles as ‘Golden March and Silver April’ – are regarded as peak seasons for steel sales in China. “However, unfortunately, China’s steel market in March didn’t produce as substantial growth as in the previous year so far as profit margins are concerned,” a Shanghai-based steel scrap analyst noted. “The firm scrap prices still didn’t make scrap exports much more attractive for traders,” he observed.
Besides, the GACC data shows that China’s steel scrap imports recovered to 30,000 tonnes in March, higher by nearly 20,000 tonnes on month, to approach the same level as in January, though these were 85% below imports in March last year. The huge on-year fall indicated the firm determination of the central government in Beijing to strictly ban the import of foreign waste material from the start of this year.
“For this April, I think ferrous scrap imports are unlikely to see a huge increase, due to the strict governmental controls,” the Shanghai- scrap analyst predicted. “For exports, I think these may shrink a bit this month due to the good domestic situation.”
The spot transaction price of 6-8mm common-grade carbon steel scrap in Zhangjiagang in East China’s Jiangsu province, the country’s core scrap consumption base, continued to hover at a high level of Yuan 2,380/tonne excluding 13% VAT on April 22, edging down by Yuan 10/t on month, according to Mysteel’s latest data.
As of April 22, exporters of US-origin HMS 1&2 (80:20) were asking $300/tonne FOB, lower by another $11/tonne on month, Mysteel data base showed.
Written by Rebecca Zhu, rebeccazhu@mysteel.net.cn
Edited by Russ McCulloch, russ.mcculloch@mysteel.com
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