China qualified yards' scrap stocks down 10% MoM in Feb
The scrap yards, all qualified by the country's Ministry of Industry and Information Technology, were holding 1.08 million tonnes of processed and unprocessed scrap by end-February. Within the total, inventories of processed scrap were lower by 9% on month at 800,500 tonnes, and those of unprocessed were down by 14.4% on month at 279,700 tonnes, the survey showed.
"Though most electric-arc-furnace (EAF) steelmakers halted operations for the CNY break, almost all integrated steel mills across China kept producing during the holiday. As a result, these mills actively purchased steel scrap for replenishment after the holiday as they had drawn down their inventories at hand to maintain production while traders and scrap dealers were enjoying their breaks," a Shanghai-based market watcher told Mysteel Global.
Moreover, with the gradual resumption of the domestic independent EAF makers, steel scrap demand from these mini-mills also increased, Mysteel Global noted.
As of February 24, the capacity utilization among 71 independent EAF steelmakers nationwide under Mysteel's regular survey increased for the third week to 43.89%, higher by 33.84 percentage points on month.
On the other hand, even though the CNY holiday officially ended on February 6, most scrapyards had not fully reopened for business until the Lantern Festival on February 15. Consequently, the slower rate of steel scrap collecting and processing among these yards resulted in the decrease in their scrap stocks, the survey showed.
Moreover, by the end of February some scrap traders had noted the decrease in steel prices (reflecting the slower recovery of steel demand from end-users) and so had sped up their delivery pace of steel scrap to mills in case of possible price drops, Mysteel Global noted.
As of February 28, China's HRB400E 20mm dia rebar price had decreased by Yuan 61/tonne ($10/t) on week to Yuan 4,868/t, and Mysteel's steel scrap price index also softened by Yuan 3.5/t on week to Yuan 3,651.3/t on delivery, both including the 13% VAT, according to the database.
Written by Lindsey Liu, liulingxian@mysteel.com
Edited by Zhenqi Yang, yangzhenqi@mysteel.com
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