Ferrous scrap prices in eastern China continued to drop and hit their lowest since Platts started the assessment in March 2005 as rebar prices extended their downturn due to weak demand and bearish sentiment.

Platts assessed heavy melting scrap 6mm and above thick Friday at Yuan 1,160/mt ($183/mt), including 17% value-added tax, delivered to Zhangjiagang, Jiangsu province, down Yuan 40 from a week earlier.

Jiangsu Shagang Group, the largest scrap user in China, on Wednesday cut its buying price by another Yuan 20/mt after a reduction of the same amount on Monday.

After the adjustment, the mill will pay Yuan 1,160/mt including VAT, delivered to Zhangjiagang, Jiangsu province, for heavy melting scrap 6mm and above thick.

Shagang has cut its buying price four times coming back from 7-day National Day holidays, amounting to Yuan 80/mt.

Yonggang Group, also based in Jiangsu province, followed suit lowering its buying price by the same Yuan 20/mt, which took the price of high quality heavy melting scrap with thickness of 8mm and above to Yuan 1,220/mt, including VAT, delivered to Zhangjiagang.

Changzhou-based Dongfang Special Steel in the province on Monday announced it would stop buying scrap and when they will return to the market remains unknown.

Maanshan Iron and Steel (Magang), the biggest steel producer in Anhui province, on Wednesday cut its buying price of plate cut-offs at least 6mm thick by Yuan 20 to Yuan 1,210/mt, including VAT, delivered to Maanshan, Anhui province.

Steel mills and traders were not optimistic about the market in view of ailing steel market.

"Scrap price has fallen to a new low and recyclers are striving for the survival in a difficult time," a trader from Anhui province said.

In Shanghai's rebar spot market, prices of 18-25mm diameter HRB400 rebar Friday were assessed down Yuan 15 on the week at Yuan 1,880-1,910/mt actual weight.