It intends to change its cfr eastern China ferrous scrap price from an assessment to an index and to launch an additional cfr northern China ferrous scrap price index.

Since February 2021, Fastmarkets has published a daily price assessment for steel scrap, heavy recycled steel materials, cfr China.

Under this proposal, Fastmarkets would publish a daily cfr eastern China price index that would replace the existing cfr China price assessment for the same market.

A transaction-based index methodology is thought to be the most robust mechanism to reliably reflect the behavior of this market and would satisfy requests from market participants for an objectively calculated price.

Fastmarkets is also proposing to launch a second cfr China scrap price index, on a cfr northern China ports basis.

This proposal is in response to the growing number of cargoes sold into the northern China region, which have typically been trading at $10 per tonne above the cfr eastern China market.

Fastmarkets’ index methodology screens outliers and applies a quantity-weighted model to ensure that the cfr China ferrous scrap prices are the most robust in the industry. Fastmarkets has no financial interest in the level or direction of the indices.

The consultation period for these proposed launches starts from July 8 and will end on August 9, with the launches taking place, subject to market feedback, on August 12.  

The proposed specifications for the east China price index are as follows:

Steel scrap, index, heavy recycled steel materials, cfr east China, $ per tonne (MB-STE-0889)
Quality: Cut structural and plate scrap, compliant with China scrap standard HRS101
Quantity: Minimum 2,000 tonnes (bulk)
Location: cfr eastern China ports
Timing: 3-10 weeks
Unit: USD per tonne
Payment terms: Letter of credit on sight
Publication: Daily, 5-6pm Shanghai time.
Notes: Minimum thickness of 6mm, minimum diameter of 10mm, length less than 1,500mm, width less than 600mm. Maximum unit weight 1,500kg

The proposed specifications for the north China price index are as follows:

Steel scrap, index, heavy recycled steel materials, cfr north China, $ per tonne
Quality: Cut structural and plate scrap, compliant with China scrap standard HRS101
Quantity: Minimum 2,000 tonnes (bulk)
Location: cfr northern China ports
Timing: 3-10 weeks
Unit: USD per tonne
Payment terms: Letter of credit on sight
Publication: Daily, 5-6pm Shanghai time.
Notes: Minimum thickness of 6mm, minimum diameter of 10mm, length less than 1,500mm, width less than 600mm. Maximum unit weight 1,500kg

To provide feedback on these indices, or if you would like to provide price information by becoming a data submitter, please contact Tianran Zhao or Lee Allen by email at: pricing@fastmarkets.com. Please add the subject heading: “FAO: Tianran Zhao/Lee Allen, re: China scrap prices.”

To see all Fastmarkets’ pricing methodology and specification documents go to https://www.fastmarkets.com/about-us/methodology.