China's import of recycled steel is set to fall in Q3, after climbing steadily since the start of the year, due to a seasonal lull in steel demand and an imbalance in global steel prices that has made international scrap dearer than in the domestic market.
Over the past month, Chinese traders and mills have backed off from importing higher priced recycled steel as a supplement to iron ore, on concerns they may not be able to pass the extra cost through raising steel prices, especially with heightened state scrutiny on commodity price inflation.
S&P Global Platts observed that the number of deals, bids, offers and indicative price points for spot CFR China recycled steel was 54 in June, up from 46 in May, but below the 97 in April and 134 in March.
As cargoes booked from China's top supplier, Japan, typically take four to five weeks to arrive, the reduced spot activity seen in May and June implies subdued import volumes in June and July.
