Posted on 22 Feb 2024
After slumping continuously since late January, the volume of ferrous scrap recycled from construction sites in China is expected to recover in the coming weeks as domestic contractors restart their work from holiday breaks, Mysteel's survey showed.
Operations at most construction sites in China were halted during the official Chinese New Year (CNY) holiday over February 10-17, when trading and transportation for steel scrap also stopped widely across the country, Mysteel Global learned.
Consequently, the volume of construction steel scrap collected by the 105 domestic steel scrap recycling companies under Mysteel's regular tracking totaled 8,775 tonnes during February 10-17, falling sharply by 9,725 tonnes or 52.6% from the pre-holiday level.
With construction sites gradually resuming operations and scrap dealers returning to the market after their holiday breaks, China may see a recovery in the supply of construction steel scrap starting this week, Mysteel Global noted.
According to Mysteel's other survey, the operational rates among the 10,094 sampled construction sites nationwide averaged 13% as of February 20, higher by 2.5 percentage points compared with the same period last lunar year. The operational rate will likely rise to around 50% by the end of this month, Mysteel assessed.
Meanwhile, as domestic electricity-arc-furnace steelmakers begin to bring their idled furnaces back online, traders are likely to ramp up their scrap collection from construction sites to meet the growing needs from steel mills, Mysteel Global noted. Such expectation has provided some support for the prices of construction steel scrap in China.
On the other hand, bearish factors in the domestic steel market, such as slow downstream consumption and high steel inventories, have cooled the sentiment among market participants, which exerted downward pressures on the prices of China's major ferrous commodities, including steel scrap, Mysteel Global learned.
As a result, China's construction steel scrap prices stood largely stable during the past few days, with the national price of rebar cuttings sitting at Yuan 2,836/tonne ($400.1/t) excluding the 13% VAT by Wednesday morning, slightly higher by Yuan 3/t from February 18, according to Mysteel's assessment.
Source:Mysteel Global
