WEEKLY: North China's scrap price up on demand prospect
Source: Mysteel
Jul 17, 2018 17:06
China’s steel scrap price strengthened moderately by up to Yuan 120/tonne over the week of July 9-13 mainly because of growing demand from the eastern and northern regions with notable rises in finished steel prices, according to market sources.
The 6-8mm common-grade carbon steel HMS (scrap) in Tianjin municipality, North China, and Dalian in Northeast China’s Liaoning province, for example, rose Yuan 120/tonne ($17.9/t) and Yuan 80/t on week respectively to Yuan 2,220/t and Yuan 2,240/t, both excluding the 16% VAT as of July 13, partly as the growing demand from Tangshan city in the neighboring Hebei province.
Tangshan steel mills have been on an emergency curbing of their sintering facilities over July 13-18 and the local authority will launch another lengthy restriction on these producers’ sintering, shaft furnace, and blast furnace capacities and coking over July 20-August 31, as reported.
Steelworks in north China, therefore, have had to raise their steel scrap procurement prices while scrap suppliers including the traders are unwilling to sell in large volume, expecting the scrap price to climb up further.
“We prefer to wait for a while to see where the prices will go, so our scrap deliveries to steel mills increased but just a bit over the week,” a scrap trader in East China’s Jiangxi province said, adding, “supply tightness is for real, and now the market is overwhelmed with the speculation on restrictions in Tangshan and the exact impact is still being assessed, which will support the scrap price in the short term.”
Steel scrap stocks at the 61 surveyed steel producers including both EAF and BF mills fell another 134,800 tonnes or 4.4% on week to 2.88 million tonnes as of July 13.
Meanwhile, China’s largest electric arc furnace (EAF) steel mill - Shagang Group in east China’s Jiangsu province has not taken a similar action yet, remaining its procurement price at Yuan 2,360 since May 30 while Zenith Iron & Steel also in Jiangsu, announced on July 11 to lift its scrap procurement price by Yuan 50/t to Yuan 2,410/t including the 16% VAT.
As of July 13, Mysteel’s survey of China’s 53 independent EAF steel mills showed that their capacity utilization rate continued to rise last week, up by 3.1% on week to 65.23% on Friday, and the, and the capacity utilization rate among the 247 blast-furnace steel mills edged up 0.09 percentage point on week to 81.52% last Friday.
Edited by Hongmei Li, li.hongmei@mysteel.com
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