Ferrous scrap prices rose in eastern China in the week to Friday to hit an over seven-month high, following higher domestic rebar prices.
Platts assessed heavy melting scrap 6 millimeters and above thick Friday at Yuan 1,360/mt ($210/mt), including 17% value-added tax, delivered to Zhangjiagang, Jiangsu province, up Yuan 50 from a week earlier and the highest since Yuan 1,370/mt on August 21, 2015.
Jiangsu Shagang Group -- the biggest scrap user in China -- Wednesday raised its buying price by Yuan 50 to Yuan 1,360/mt, including VAT for heavy melting scrap 6 mm and above thick delivered to Zhangjiagang, Jiangsu province, a company source said.
Yonggang Group, also in Jiangsu province, hiked its buying price by Yuan 30/mt Thursday after an increase of the same amount Wednesday, which took the price of high quality heavy melting scrap with thickness of 8mm and above thick to Yuan 1,420/mt, including VAT, delivered to Zhangjiagang.
Changzhou-based Zenith Steel followed suit increasing its buying price of heavy melting scrap at least 6 mm thick by Yuan 50 to Yuan 1,300/mt, including VAT, delivered to Changzhou.
Maanshan Iron and Steel (Magang), the biggest steel steelmaker in Anhui province, raised its buying price of plate cut-offs 6 mm and above thick by the same Yuan 50/mt to Yuan 1,410/mt Wednesday, including VAT, delivered to Maanshan, Anhui province.
Market participants said they believed scrap prices would be little changed in the near term because of the well supported steel market.
"It's hard to say where scrap prices will go as the cost of producing steel with scrap is almost equal to that with hot metal," a Jiangsu-based trader said, adding that scrap prices would at least not go down in the near future.
In Shanghai, the spot price of 18-25mm diameter HRB400 rebar was assessed at Yuan 2,330-2,400/mt theoretical weight and including VAT, up by Yuan 40 on the week. The prices have increased for three consecutive weeks by a total of Yuan 150/mt.
