China steel scrap prices keep falling, stocks up
Posted on 29 September 2021
Chinese domestic prices of steel scrap continued to edge down during the week of September 17-24, Mysteel’s latest weekly survey has found, with scrap consumption among domestic steel mills continuing to fall, given the stringent curbs on steel output nationwide.
As of September 24, Mysteel’s steel scrap price index had weakened for the second week, easing by another Yuan 18.3/tonne ($2.8/t) on week to Yuan 3,695.3/t on delivery and including the 13% VAT, according to the database.
The intensified restrictions on energy consumption among various industries in China’s eastern and southern regions have forced more steel mills including both blast-furnace (BF) and electric-arc-furnace (EAF) producers to slow production or suspend operations to reduce power use, Mysteel Global noted, causing their need for steel scrap to diminish.
In tandem, over September 17-23, daily steel scrap consumption among the 61 BF and EAF producers sampled by Mysteel across China averaged 2,953 tonnes/day, down 2.1% on week, while steel scrap deliveries to them remained largely stable at 3,189 t/d, up by a tiny 0.2% on week, according to Mysteel’s assessment.
The drop-off in consumption when deliveries to mills were stable saw steel scrap stocks at these 61 mills edge up for the second week, climbing by another 983,000 tonnes or 3.6% on week to 2.8 million tonnes as of September 23, Mysteel’s data shows.
“With just one week to go before the National Day holiday over October 1-7, some steel mills – especially EAF producers – still purchased steel scrap for replenishment, just to make sure they have sufficient stocks to maintain operations during the break,” a Shanghai-based market watcher commented.
During the National Day break, most scrap processors, traders and logistics firms will shut their offices, so those steelmakers continuing to produce must accumulate enough scrap to last till October 8 when China reopens.
“Also, after noting the replenishing needs of steelmakers, some scrap traders took a fast in-and-out attitude, speeding up their deliveries to mills, as the market’s uncertainties after the holiday break have dissuaded them from holding too much inventory at hand,” the Shanghai source added.Source : Mysteel Global