Chinese Ferrous Scrap Exports Tumble 81% in Q1-2018

China world’s largest consumer of ferrous scrap has witnessed significant fall in scrap exports in Q1, 2018. According to recent customs data, the country exported 162,690 MT ferrous scrap in Q1, 2018. On the quarterly basis, China’s scrap exports tumbled by 81% Q-o-Q as against 840,938 MT ferrous scrap exports in Q4, 2017. On the other hand, exports have skyrocketed Y-o-Y against minor volumes recorded (482 MT) during Q1, 2017.

Average local scrap prices increase in Q1, 2018 – For major eastern provinces in China, Average domestic scrap purchase prices increased by RMB 305/MT(USD 48) Q-o-Q in Q1, 2018. The average price is gauged at RMB 2360/MT(USD 373) in Q1, 2018 as against RMB 2055/MT in Q4, 2017.

The country surprised the whole world last year for its skyrocketed scrap exports. Over the closure of obsolete induction furnaces and winter production cuts on environmental issues, China raised its scrap exports above 2 MnT in 2017.

Domestic demand for scrap is likely to move down in coming months in China amid resuming productions with blast furnace route. Ferrous scrap exports may increase again in Apr’18 amid higher generation and competitive prices for low-grade scrap from China. It has already observed that prices for hot metal moved down steeply as compared to scrap prices in Mar’18. Producers who were depended on scrap have witnessed heavy losses on sharply collapsed steel prices in China.

Increased EAF outputs and increased local demand in Q1, 2018 could have led to the drop in scrap export volumes from China since last four months. According to CAMU, China’s scrap consumption recorded 148 MnT in 2017 which is expected to cross 200 MnT by 2020.

Vietnam remained largest importer of Chinese ferrous scrap in Q1 – Vietnam stood as the largest destination for Chinese ferrous scrap in Q1-CY18. Vietnam imported 88,367 MT scrap (down 49% M-o-M) comprising 54% share in total Chinese ferrous scrap exports in Q1’2018. Followed by other South-East Asian countries like Indonesia (42,559 MT, -87% Q-o-Q), Malaysia (8,660 MT, -91% Q-o-Q) followed by other major importers like Japan (5,318 MT, +3% Q-o-Q), Thailand (4,896 MT, -74% Q-o-Q) and India (4,888 MT, – 67% Q-o-Q).

Chinese scrap exports fell 33% in Mar’18 – In Mar’18, China witnessed its fourth successive fall in scrap exports since Dec’17, China exported 34,530 MT ferrous scrap recording a drop of 33% M-o-M in Mar’18 as against 51,240 MT ferrous scrap in Feb’18. China’s ferrous scrap exports have risen steeply compared with the negligible ferrous scrap exports in Mar’17.

The monthly average price for Mar’18 month remained at RMB 2,268/MT(USD 359) as against RMB 2408/MT in Feb’18. Prices in major provinces like Jiangsu, Shandong, Hebei and Tianjin decreased by RMB 150-200/MT on M-o-M basis for HMS (6mm-10mm) till the end of Mar’18 in China. Slowdown in activities on account of Chinese New Year holidays in mid of the February kept trade activities low. Also with weakening finish steel prices in Mar’18, major steelmakers reduced domestic scrap purchase prices.

Vietnam witnessed 21% fall in scrap imports in Mar’18 as against MT imports in Feb’18. It imported 22,483 MT occupying highest 65% in total scrap exports from China, followed by other major importers like Indonesia (20%), Malaysia (8%) and India (3%) respectively. While Japan and Thailand observed nil imports in Mar’18.

Country-wise China ferrous scrap exports –

Quantity in MT,
Source: SteelMint Stats & Customs Data