GACC: China's stainless scrap imports drop in November

The decrease was primarily driven by a significant drop in shipments from Japan, China's top supplier of stainless scrap. Imports from Japan fell by 20.7% on the month to 3,272 tonnes, the GACC data revealed, reflecting weaker demand for imported scrap from Chinese stainless steel manufacturers.

The decline in scrap imports coincided with a shift by Chinese stainless steel producers toward low-cost nickel pig iron (NPI) as a primary raw material for long-process stainless steel production. The use of NPI, a cost-effective alternative, improved producers' profit margins, Mysteel Global noted.

Mysteel's survey showed that as of December 2, the profit margin for producers using imported high-grade NPI to make 304-grade stainless cold-rolled coil (CRC) rose to 0.63%, up from a loss of 0.93% on November 1.

This trend was mirrored in the import data for NPI. In November, China imported 882,700 tonnes of NPI, up 27.8% from October and 29.9% year-on-year, according to GACC data.  

A Shanghai-based analyst explained that imported stainless scrap has been less competitive this year due to abundant and cheaper domestic scrap supplies. November's stainless scrap imports were 71.4% lower than the same month last year, while total imports for January-November fell by 71.2% year-on-year to just 87,500 tonnes. 

The average unit price of imported stainless scrap in October, calculated by Mysteel Global based on GACC data, was $1,063.9/tonne. Meanwhile, the price of 304-grade stainless scrap in East China's Wenzhou was assessed at Yuan 9,400/tonne ($1,287.6/tonne) as of December 20, down by Yuan 300/tonne from the previous month.

Written by Adele Pan, panqinjie@mysteel.com      

Edited by Russ McCulloch, russ.mcculloch@mysteel.com