Market: China's steel scrap price may slip in near term
Source: Mysteel
Jul 05, 2018 13:32
China’s domestic steel scrap price is expected to soften moderately in July mainly because of the dampening procurement enthusiasm from the steel mills with the latter’s build-up in finished steel products and scraps, market sources shared with Mysteel on July 4.
“July-August is the traditional slack season for steel demand in China as the country’s outdoor construction sites tend to be affected with unhealthy high temperatures or heavy rainfalls,” a steel scrap trader in East China’s Jiangxi province said.
China’s steel scrap price went downward together with the declines in domestic steel prices since late June, according to Mysteel’s database.
In the spot scrap market in Zhangjiangang, a core scrap consumption base in China, the 6-8mm HMS scrap price declined Yuan 20/tonne ($3/t) or 1% on week to Yuan 2,090/t including the 16% VAT as of June 29, as the local rebar price saw a weekly fall of Yuan 60/t to Yuan 4,142/t including the 16% VAT during the period.
“Our steel scrap deliveries to the domestic steel mills have shown signs of slowing down these days, and their scrap procurement requirements have been more stringent with impurities with the central government’s crackdown on environmental protection facilities,” he said, adding his scrap yard will decelerate the recycling pace, lowering the processing cost until the demand for scrap picks up.
Mysteel’s survey on China’s 53 independent EAF steel mills showed that their capacity utilization rate nudged up by 0.28% on week to 60.5% as of June 28, but it was far lower than the 79.6% capacity utilization rate among 163 blast-furnace steel producers nationwide.
Meanwhile, steel scrap stocks at China’s 61 steelmakers including both EAF and BF mills were at high levels too, with the total volume rose 150,600 tonnes or some 5.2% on week to 3.04 million tonnes as of June 28, partly due to less daily consumption.
On the other hand, finished steel inventories at the steel mills and traders in China continued to grow for the second consecutive week, up 2.3% on week to 14.9 million tonnes as of June 28, which may curtail the domestic steel mills from further expanding their output.
Jiangsu Shagang Group (Shagang), China’s largest EAF mill headquartered in Zhangjiagang city, East China’s Jiangsu province, has remained its scrap procurement price unchanged for over one month now, which also indicated its lackluster enthusiasm in procuring new scrap supplies.
According to Shagang’s latest pricing policy as of May 30, the mill is paying Yuan 2,340/t including the 16% VAT for premium-quality HMS steel scrap on terms of delivery to the plant, or Yuan 40/t less than the previous pricing policy on May 26.
Written by Rebecca Zhu, rebeccazhu@mysteel.net.cn
Edited by Hongmei Li, li.hongmei@mysteel.com
You May Also Like
Taiwan's Feng Hsin holds rebar, scrap prices
Apr 24, 2018 13:04
Japan's steel scrap market down further on mills' price cuts
Apr 04, 2018 10:40
Feng Hsin cuts scrap price by $10/t on global softening
Apr 02, 2018 16:49
Jiangsu's steel scrap prices static on rising steel
Mar 30, 2018 08:30
Tokyo Steel lifts scrap prices first time in six weeks
Mar 02, 2018 09:34