China – world’s largest steel producer has witnessed a notable drop of 34% Y-o-Y in its ferrous scrap imports in Q1’2018. According to recent customs data, the country imported 456,549 MT ferrous scrap in Q1’2018 as against 689,934 MT ferrous scrap imports recorded during Q1 2017. The country registered fall of 22% Q-o-Q in Q1’2018 against 583,209 MT ferrous scrap imports in Q4 last year.
Average domestic scrap prices remained lower against imported – In Q1, 2018, for major eastern provinces in China, the domestic average price is gauged at RMB 2360/MT (USD 373) including 17% taxes in Q1, 2018 as against RMB 2055/MT in Q4, 2017. While average Japanese H2 scrap offers stood at JPY 36,300/MT, FoB Japan (USD 340) indicating imported scrap prices in China remained higher as compared with local scrap prices. Cheaper domestic scrap could have lessened imports.
Imports from United States and Australia multiplied sharply on Q-o-Q basis – In Q1 2018, China witnessed sharp rise in imports from United States and Australia which were abruptly down in Q4, 2017 amid winter production cuts. United States and Australia imported each 128,934 MT and 30,273 MT ferrous scrap which were multiplied sharply in Q1 2018 as against imports in Q4 2017.
Japan stood as the largest exporter of ferrous scrap to China during Q1, 2018. Japan exported 265,227 MT ferrous scrap comprising 58% share in total Chinese ferrous scrap imports in Q1’18, followed by United States (28%), Australia (7%), South Korea (2%) and China (2%) respectively.
China’s ferrous scrap imports down 10% M-o-M in Mar’18 – Chinese ferrous scrap imports recorded at 169,246 MT, which stood 10% shorter on M-o-M as against 187,671 MT ferrous scrap imports in Feb’18.
Japanese scrap exports recorded at 64,780 MT, down 43% M-o-M in Mar’18 as against 113,358 MT ferrous scrap in Feb’18. Although Japan remained largest scrap supplier, China has witnessed an abrupt hike in scrap imports from Australia in Mar’18. Followed by other major suppliers were United States (62,287 MT, -5% M-o-M), Australia (28,882 MT, +4706% M-o-M) and South Korea (5,573 MT, +67% M-o-M) respectively.
EAF crude steel output likely to rise significantly – China’s EAF steel production is expected to rise at faster pace in CY18 which presently contributes around 7% of total crude steel production. According to a report of Northeastern University of Metallurgy, till the end of 2018 EAF capacities in China will rise above 200 MnT which will produce around 120 MnT crude steel with the proportion of 14.5% in total crude steel production in 2018 in China, indicating high grade scrap imports to continue at similar levels in coming days. According to CAMU, China’s scrap consumption recorded 148 MnT in 2017 which is expected to cross 200 MnT by 2020.
Country-wise China ferrous scrap imports –
| Country | Q1 2018 | Q4-2017 | Q-o-Q % Change | Q1 2017 | Y-o-Y % Change | Mar’18 | Feb’18 | M-o-M % Change |
| Japan | 265,227 | 518,285 | -48.83% | 473,559 | -43.99% | 64,780 | 113,358 | -42.85% |
| United States | 128,934 | 1,730 | 7352.83% | 123,359 | 4.52% | 62,287 | 65,622 | -5.08% |
| Australia | 30,273 | 1,414 | 2040.95% | 34,447 | -12.12% | 28,882 | 601 | 4705.66% |
| South Korea | 11,692 | 27,138 | -56.92% | 20,806 | -43.80% | 5,573 | 3,347 | 66.51% |
| China | 6,539 | 10,183 | -35.79% | 8,074 | -19.01% | 880 | 1,200 | -26.67% |
| Others | 13,884 | 24,459 | -43.24% | 29,689 | -53.24% | 6,844 | 3,543 | 93.17% |
| Total | 456,549 | 583,209 | -21.72% | 689,934 | -33.83% | 169,246 | 187,671 | -9.82% |
Quantity in MT,
Source: SteelMint Stats & Customs Data
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