Industry sources told Fast Markets that on Friday, March 5, the plunge in China's steel futures and spot prices kept buyers away from the import market.
The overnight price drop of rebar, hot rolled coil and iron ore futures suppressed buying interest, and the bid for imported HRS101-grade heavy waste (HS) was US$500-502 per ton of CFR China.
The seller’s offer was US$510 per ton of CFR China. Major market participants estimate that the price is US$505-510 per ton CFR China.
A Singaporean trader said: "Any quotation higher than US$510 per ton CFR China will not work, because domestic prices have fallen and Chinese steel mills are unlikely to accept it."
This is especially true after the price of rebar in East China fell by 80-90 yuan ($12.36-13.91) per ton on Friday to 4,640-4,670 yuan per ton. Fastmarkets learned that although major steel mills in Jiangsu maintained their domestic scrap purchase prices at 3,350-3,390 yuan, some small steel mills lowered their purchase prices by 20-30 yuan per ton on Friday.
According to sources, Chinese traders previously traded at US$510-515 per ton of CFR China, which no longer represents the spot market.
On Friday, the fast market's price assessment of scrap steel and heavy recycled steel materials was US$505-510 per ton CFR China, a decrease of US$5 from the US$510-515 per ton CFR of the previous trading day.
The 180,000 tons of Japanese scrap supplied to major South Korean buyers on Wednesday also disturbed buyers, who were deterred by the oversupply. This is especially true because buyers only purchased 60,000 tons of high-grade Shindachi and HS scrap at 48,500 yen (US$454) and 47,500 yen per ton of FOB Japan.
Last Friday, another Korean steel producer bid for Japanese H2 scrap at 43,000 yen per ton FOB. It is worth noting that the bid price is 500 yen/ton lower than the bid price of the first steel mill for the same grade.
A trader source said: “Sellers are seeking to cash out and make a profit, which is why some people in the market believe that prices may peak in the short term.”
A source from a Japanese scrap supplier said: "It feels like the market is about to reach its peak, or maybe we are already on the top."
In the “double-rest meeting” held in Beijing at the annual meeting of China's top legislative and political advisory body, the uncertainty about industrial regulations also caused a wave of emotions.
Market sources expect that there will be a series of announcements after the meeting, including tightening the money supply to reduce quantitative easing and prevent the financial market from overheating.