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Kallanish Kallanish

Knowledge matters Knowledge matters

February, 25th 2021

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JAN 19
09:49

First Chinese scrap import cargo readies for arrival

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China is about to see the arrival of its first ferrous scrap shipment after these imports were allowed from 1 January 2021, Kallanish notes.

Baowu Group and Japan's Mitsui & Co signed the first Chinese scrap import deal of the year on 1 January, with the approximately-3,000-tonne cargo to soon arrive in China. The ship carrying the cargo is the Tong Mao 1, which departed from Kawasaki, Japan on 14 January. The load capacity of the ship is about 3,815 deadweight tonnes, according to Marine Traffic data.

The latest shipping data shows the ship is due to arrive at Shanghai Port on 20 January, marking the restart of China's scrap imports.

The transaction price of this deal is reported to be at $470/tonne cfr China, but traders believe the effective transaction price may be as low as $450/t cfr. Taking into account the date the contract was signed, the price is still higher than the current domestic market level. 

As a giant in the Chinese steel industry, the government believes that Baowu has the ''…responsibility'' to complete the first import scrap transaction on behalf of Chinese steel companies, market participants observe.