China's scrap supply from ELV recycling seen falling in Jan
During last month, a total of 37,700 ELVs were processed at the 85 car dismantling and scrapping companies nationwide tracked by Mysteel, some 6.7% fewer than during November. By the end of December, the total inventories of ELVs held by these sampled companies had also dropped 15.2% on month to reach 10,800 units, the survey showed.
Steel scrap demand expanded last month as steelmakers began building up feed stocks to maintain production during the Chinese New Year holiday break in mid-February, Mysteel Global noted. As such, the ELV scrappers sped up their sales to meet the growing demand, which led to the decrease in their stocks, market sources observed.
Besides, the steady climb in steel scrap prices last month also encouraged the recycling companies to sell more of their inventory to gain profits, Mysteel Global learned. During December, the selling prices of steel scrap recycled from ELVs among the 33 domestic vehicle scrapping firms Mysteel tracks averaged Yuan 2,431/tonne ($343.3/t), higher by Yuan 69.4/t on month.
However, entering January prices of Chinese steel scrap and demand for it are both falling, as most blast furnace steelmakers have completed their stockpiling of feed materials, as reported, while electric-arc-furnace mills are planning to stop production to kick off their CNY holidays earlier.
As of January 24, China's national steel scrap price index was assessed by Mysteel at Yuan 3,045.1/t including the 13%, lower by Yuan 25.7/t or 0.8% from the beginning of the month.
In addition, the enthusiasm of the vehicle scrappers for breaking ELVs may also cool with the CNY holiday around the corner, so supplies of steel scrap from them are likely to decline this month, market sources believed.
Written by Anthea Shi, shihui@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com
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