GACC: China H1 ferrous scrap imports slump 54% YoY
In June alone, the country's imports of ferrous scrap registered 14,739 tonnes, down by a significant 59.3% compared to the same period last year and lower by 41.3% on month, the GACC data showed.
The wide price spread between domestic and foreign steel scrap materials continued to deter Chinese traders and steelmakers from importing scrap in large quantities, Mysteel Global noted.
During last month, the price of HS scrap from Japan, the top exporter of ferrous scrap to China, averaged $383/tonne excluding the 13% VAT, higher by some $37/t than the average spot transaction price for 6-8mm common carbon steel scrap in East China's Jiangsu over the same period, according to Mysteel's tracking.
China's ferrous scrap imports from Japan plunged 56.4% on month and 48% on year to reach 7,844 tonnes in June, which accounted for 53.2% of the country's total imports, according to the GACC data.
In addition to the price disadvantage, the waning demand also discouraged domestic scrap users from buying materials from international markets, not to mention the persistent losses they were suffering on steel sales, Mysteel's other survey showed.
For example, by the end of last month, the capacity utilization among the 87 independent electric-arc-furnace steelmakers under Mysteel's regular tracking averaged just 51.37%, lower by 4.56 percentage points from the end of May.
These mini-mills are continuing to rein in their production due to the narrow steel margins, while the scrap materials from overseas markets remain more expensive than domestic scrap this month, Mysteel Global noted. As such, China's ferrous scrap imports are likely to hover at a low level in July, Mysteel's survey suggests.
Written by Anthea Shi, shihui@mysteel.com
Edited by Alyssa Ren, rentingting@mysteel.com
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