Industry insiders told Fast Market that on Friday, March 5th, the sharp drop in China's steel futures and spot prices kept buyers away from the import market.
The overnight price decline of rebar, hot-rolled coil and iron ore futures dampened purchasing interest. The bid for imported HRS101 grade heavy scrap (HS) is $500- $502 per ton CFR China.
The seller's quote is 510 US dollars per ton CFR China. Major market players estimate that the price is $505- $510 per ton CFR China.
A trader in Singapore said, "Any CFR offer from China higher than $510 per ton is not feasible because domestic prices are falling and Chinese steel mills are unlikely to accept it."
This is especially true after the price of rebar in East China dropped by 80-90 yuan (12.36-13.91 US dollars) per ton to 4,640-4,670 yuan per ton on Friday. Fastmarkets learned that although major steel mills in Jiangsu have maintained their domestic scrap steel purchase prices at 3,350 to 3,390 yuan, some small steel mills reduced their purchase prices by 20 to 30 yuan per ton last Friday.
Sources said that the previous trading price of Chinese traders was $510- $515 per ton CFR China, which no longer represents the spot market.
On Friday, the Rapid Market assessed the price of scrap steel and heavy recycled steel materials at CFR China at $505- $510 per ton, down $5 from the previous trading day's CFR of $510- $515 per ton.
The 180,000 tons of Japanese scrap steel provided to major South Korean buyers on Wednesday also unsettled the buyers, who were intimidated by the oversupply. This is especially true, as the buyer purchased 60,000 tons of high-grade Shindachi and HS scrap steel at FOB Japan prices of 48,500 yen (454 US dollars) and 47,500 yen per ton respectively.
Last Friday, another South Korean steel producer bid 43,000 yen per ton FOB for Japanese H2 scrap steel. It is worth noting that this bid price is 500 yen per ton lower than that of the first steel mill for the same grade.
A trader source said, "Sellers are seeking to cash out and make profits, which is why some people in the market believe that prices may peak in the short term."
A source from a Japanese scrap steel supplier said, "It feels like the market is about to peak, or perhaps we are already at the peak."
During the "weekend meeting" held in Beijing at the annual meeting of China's top legislative and political advisory body, the uncertainty of industrial regulations also aroused wavering sentiment.
Market sources expect that a series of announcements will be made after the meeting, including tightening the money supply to reduce quantitative easing and prevent the financial market from overheating.