Posted on 09 Jan 2025
After staying generally stable throughout December, Chinese ferrous scrap prices will likely lose ground this month as market activity tapers off ahead of the Chinese New Year (CNY) holiday in about two weeks' time, Mysteel's latest report on the market suggests.
Entering January, the country's steel scrap prices have already declined markedly, with Mysteel assessing the national composite steel scrap price on January 7 at Yuan 2,552.6/tonne ($348.2/t) including the 13% VAT, lower by some Yuan 56/t or 2.1% from the end of December.
Since most electric-arc-furnace (EAF) steelmakers will gradually stop production and switch to holiday mode before the CNY holiday officially starts on January 28, domestic demand for steel scrap is set to wane in the coming weeks, as reported.
Meanwhile, blast furnace (BF) steel producers have largely completed their replenishment of feed materials for their production during the week-long holiday, so their scrap procurement will slow down, the report observes.
Moreover, currently steel scrap barely has any price advantage over hot metal, a factor causing the BF mills to be even more reluctant to use scrap materials, Mysteel's data showed.
As of January 7, for example, the average cost of making steel incurred by integrated mills in East China's Jiangsu province was Yuan 2,233/t excluding the 13% VAT, higher by some Yuan 17/t compared with using hot metal, according to Mysteel's assessment.
As such, the mills with immediate buying demand for scrap will aggressively cut their purchase prices, the report predicted.
Nevertheless, actual transactions in the scrap market will likely become scarce from late January as scrap suppliers will also close their businesses ahead of the CNY celebrations, according to the report.
Scrap processors have already slowed their collection of raw scrap materials to prepare for their holiday breaks, Mysteel's survey showed. As of January 3, the total inventories of processed and unprocessed steel scrap held by the 584 scrapyards qualified by the country's Ministry of Industry and Information Technology had slid to 1.04 million tonnes, lower by 1.6% from the end of December, according to Mysteel's tracking.
Source:Mysteel Global
