Posted on 12 Aug 2021
The weakening on China’s domestic steel prices since the start of August has not rippled to iron ore, but domestic steel scrap prices too because of the close correlation of the two steelmaking raw materials as well as their similar market near-term market outlook in that demand will soften from the domestic steel producers either with blast furnaces (BFs) or electric-arc-furnaces (EAFs).
Beijing has reiterated its determination to bring down steel output on year for 2021 and at the same time, many parts of the country including Sichuan, Guangxi and Guangdong have been facing power supply shortage, which in all have lowered the capacity utilization rates of BFs and EAFs, and by August 10, Mysteel’s steel scrap price index had edged down by Yuan 17.2/tonne ($2.7/t) from July 30 to Yuan 3,727.8/t on delivery and including the 13% VAT.
The decline was not as substantial as Mysteel SEADEX 62% Australian Fines’ decrease of $18.45/dmt from July 30 to $161.75/dmt CFR Qingdao, as scrap utilization in steelmaking is still with the advantage in cost against iron ore, but the downtrend was aligned.
As of August 5, the BF utilization rate among China’s 247 steel mills nationwide decreased for the third week by another 1.1 percentage points on week to its five-week low of 85.73%, and steelmaking capacity utilization rate among China’s 71 EAF mills decreased for the third week too, down 4.25 percentage points on week to its five-month low of 59.8%, according to Mysteel’s data.
Mysteel’s other survey on daily scrap consumption among China’s 61 surveyed steel mills including both BF and EAF producers posted a decline for the sixth week to 3,281.7 tonnes/day over July 30 - August 5, or a six-month low, Mysteel’s data show.
Source: Mysteel
Source:Mysteel Global
