Steel scrap import at Zhangjiagang Port in January soars by 70pct

Saturday, 19 Feb 2011

According to Zhangjiagang Entry Exit Inspection and Quarantine Bureau, steel scrap imports through Zhangjiagang port in this January soared by 70.1%YoY to 148,000 tonnes and its total value flying 405.1%YoY to USD 140 million.

Analysts attribute the burst increase to four reasons

1. Demand for raw materials rallies as global economy warms up since last year. When US dollar continues to devalue, international scrap price broke USD 400 per tonne CFR last May and hold in a high level. Scrap import via Zhangjiagang Port declined rapidly and almost stopped in Mid September.

2. Scrap recycling slows greatly in China last year, causing scrap inventories to tight especially when mills put over-reliance on scrap to replace some consumption of iron ore at previous month. As a result, scrap inventories at mills side become seriously limited.

3. Spurred by domestic inflation, price of scrap with lower quality than foreign arrivals jumps and almost touches the level of the imported price. Imported scrap is the best choice for domestic steelmakers to make up purchase shortage thus.

4. Steelmakers in China, the world’s largest producer and iron ore importer, have been seeking to diversify raw material sources to reduce the cost of iron ore imports. China has urged state-owned mills to increase use of scrap, making demand for scrap increase.

(Sourced from MySteel.net)