China custom clears first imported scrap cargo

Chinese customs authorities has cleared the country's first imported scrap cargo since new scrap import standards and HS codes came into effect.

The 3,002t ferrous scrap cargo, bought by China's Baowu Steel's trading subsidiary, Ouyeel, from Japanese supplier Mitsui, cleared customs today at Shanghai port. The cargo was bought on 1 January — the first day the new standards came into effect — and arrived in China on 20 January.

Clearance for this cargo was delayed as it was transported to Shanghai from another Chinese port and a customs check was rescheduled. The check at Shanghai was heard to have begun on 26 January and took three days to complete.

Argus was not able to confirm the rejection rates on the cargo, but market participants have widely expected that these rates were not significant.

Several other Chinese buyers have bought material from Japan, and shipments are expected to reach Chinese shores in February-March.

Recycling firm Zhejiang Judong bought 2,800t of HS from Heiwa Shoji on 1 January. The cargo is expected to arrive in China in early February.

China's domestic scrap price setter, Shagang in Jiangsu, bought 3,000t from Japanese supplier Hanwa, with shipment scheduled for second-half February.

Hanwa also sold 2,000t of heavy recycling steel material to Chinese state-owned Ansteel in Liaoning, northeast China. This cargo is scheduled to arrive in Bayuquan port in Liaoning in early March.

The fact that the first imported scrap cargo since the country resumed imports has cleared customs without significant delays or rejection has encouraged Chinese mills and Japanese suppliers to begin new negotiations.

A significant portion of the material bought so far is expected to be HS — a prime grade scrap similar to P&S under ISRI standards.

One Chinese steel mill plans to begin negotiations with Japanese suppliers next week, it told Argus today. It said it is interested only in HS and will aim to start bidding at a maximum level of $410/t cfr. Another Chinese mill yesterday said it received offers for HS at $420/t cfr.

Two Japanese trading firms said they received indications from China yesterday at $435-440/t cfr for HS and they consider these levels workable.

A third Japanese trading company said it received Chinese bids at $410/t cfr, which it rejected.

By Chi Hin Ling