China: Ferrous scrap prices likely to edge up in Mar’26 amid tightening availability

• China scrap prices seen rising in March on stronger mill demand
• Low post-CNY inventories and slow supply recovery support prices

Mysteel Global: Chinese ferrous scrap prices are expected to edge higher in March as stronger procurement from steelmakers and tightening scrap availability support the market. The country’s composite scrap price averaged RMB 2,430/t ($352/t) in February, up 0.8% m-o-m, and further increased to around RMB 2,440/t ($353/t) as of 3 March, while scrap inventories across 300 BF and EAF mills dropped to about 4.9 mt, down 1.4 mt (23%) from pre-Chinese New Year levels.

Inventory levels and procurement trends

Steelmakers have stepped up scrap procurement after inventories declined sharply following the Chinese New Year (CNY) holiday in mid-February, when trading activity slowed and mills relied on existing stocks for production. The sharp drop in stocks has prompted mills to increase procurement to rebuild inventories and secure adequate feedstock for ongoing production.

Demand recovery from EAF steelmakers

Scrap demand is expected to strengthen as EAF mills gradually restart operations after the holiday. Mysteel’s survey shows the average capacity utilization rate of 94 independent EAF mills was just 7.4% by end-February but is expected to recover to around 50% by end-March, which could increase scrap consumption.

Supply constraints supporting prices

Scrap availability remains relatively tight as scrap processors have been slow to resume operations after the holiday. The slower supply recovery, combined with improving mill demand, may support domestic scrap prices in the near term.

Market outlook

Despite the expected upward trend, price gains are likely to remain moderate. Participants note that the recovery in downstream steel demand remains relatively slow, which may limit increases in finished steel prices. As a result, while tighter scrap supply and improving mill demand are expected to support the market, the overall upside in scrap prices may remain capped by broader steel market conditions.

Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.