Market participants said that in the first half of July, scrap prices in the region are increasing, mainly due to reduced supplies and increased demand. On July 19, steelmaker Jiangsu Shagang in eastern China raised the price of heavy metal scrap by 60 yuan (about $ 9) per tonne to 2,760 yuan (about $ 403) per tonne. The price is up 7 percent since the beginning of June and is the highest since November 2018.
Rising costs for competing raw materials, iron ore and metallurgical coke have spurred the use of scrap.
Higher demand and reduced supply have led to a decrease in scrap stocks at processing plants. Heat and rainy weather were the main reasons for the decline in supplies, which led to a reduction in the collection and transportation of scrap, as well as increased environmental protection measures to prevent the demolition of buildings and ships that generate scrap.
In January-May of this year, the import of ferrous scrap in the country fell by 84 percent to 120,000 tons. This trend is expected to continue as China has reclassified certain categories of scrap as restricted raw materials effective July 1.