Demand to assist China’s steel scrap price up
On September 14, Mysteel’s market prices of 6-8mm common grade steel scrap in Zhangjiagang city in East China’s Jiangsu province, the country’s core scrap consumption base, went up again by Yuan 20/tonne ($2.91/t) on week to Yuan 2,390/t and excluding the 16% VAT.
“We look forward to a good scrap market in late September, as domestic steel mills will need to restock to guarantee their normal production paces amid the two upcoming holidays, while traders may be reluctant to sell in large volumes, betting on price rises in the coming days,” a Shanghai-based steel scrap analyst said.
Mysteel’s latest weekly survey on steel scrap inventories among China’s 61 electric-arc-furnace (EAF) and blast-furnace (BF) steel plants showed that the volume fell by 151,600 tonnes or 4.8% week on week to 2.97 million tonnes as of last Friday, and their existing scrap stocks will be lasting for 13.67 days on average, off 0.75 day from one week earlier.
Near-term market outlook does seem promising for China’s domestic steel scrap from Mysteel’s surveys on the capacity utilization rates among the steel mills.
On September 13, the capacity utilization rate at the 53 EAF steel plants edged up by just 0.29 percentage point on week to 72.93%, and the capacity utilization rate of blast furnaces among the 247 Chinese steel plants nationwide also nudged up another 0.22% over the week to 79.83%, according to Mysteel’s latest surveys released on September 14.
“Currently, we’re busy with scrap collection, separation and recycling to prepare for the robust demand and the new round of price rises, as the weather here is cool and good for steel sales,” a steel scrap trader from East China’s Jiangxi province said, adding “the frequent restrictions on blast furnaces of the steel mills out of environmental concerns will also drive more business to us from domestic steel plants.”
Last week, very few steel plants raised their scrap procurement prices as China’s largest EAF steelmaker-Jiangsu Shagang Group announced on September 11 to still pay 2,720/t including the 16% VAT and the delivery to mill for the HMS grade scrap despite the market speculation on a possible price hike by Shagang, Mysteel notes.
On the same day, Shagang announced to roll over its rebar list prices for the sale over September 11-20, thus ending its list rebar price rises for the past over 50 days, though market sources interpreted this as a pause from Shagang to wait for the spot market prices to catch up, as Mysteel reported. Shagang normally adjust its scrap price in accordance with its rebar prices.
Written by Rebecca Zhu, rebeccazhu@mysteel.net.cn
Edited by Hongmei Li, li.hongmei@mysteel.com
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