Chinese scrap exports saw a remarkably strong increase in the first quarter of 2018, Kallanish learns from China Customs data.

China exported 164,183 tonnes of scrap over January to March, up by 33,934% year-on-year. These went mainly to countries in south-east Asia. Over the same period Chinese scrap imports totalled 460,000t, down by -33.8% y-o-y, Customs data reveal.

The ballooning increase in export was mainly due to a relative low volume in 2017, plus the steel price decrease and negative sentiment around electric arc furnace steel production in Q1 2018. Some EAF steel producers have even reported losses in Q1 2018 due to the unexpected steel price decrease, followed by a rapid slide in domestic scrap prices. The removal of steelmaking restrictions and the resumption of blast furnaces are piling more pressure on domestic scrap prices.

With steel prices gradually recovering from mid-April onwards, Chinese domestic scrap prices are also now rebounding slightly, Kallanish notes.