Scrap sourced from China building sites slows as winter bites

During December 15-21, the volume of construction steel scrap collected by the 105 domestic steel scrap recycling companies under Mysteel's regular survey totalled 37,570 tonnes, lower by 7.8% on month.

The adverse weather conditions are proving a major impediment to the gathering and sorting of construction scrap, especially in the country's northern regions where building contractors have gradually reduced their outdoor working hours to avoid the severe winter cold, according to survey respondents.

Meanwhile, the heavy snowfalls and blizzards that hit North China earlier this month continue to seriously hamper road transportation there, making it more difficult for dealers to collect scrap materials, Mysteel Global noted.

The tightened supply is driving up the prices of construction steel scrap, according to Mysteel's tracking. For example, as of December 26, the national price of rebar cuttings was assessed by Mysteel at Yuan 2,824/tonne ($398.9/t) excluding the 13% VAT, an eight-month high after rising for eight straight working days.

On the other hand, the stable demand for steel scrap from steelmakers is also supporting the gains that scrap prices are making, Mysteel's survey showed. During December 15-21, total steel scrap consumption among the 211 blast furnace and electric-arc-furnace steelmakers under Mysteel's weekly coverage reached 2.84 million tonnes, a new high since late March 2022.

The steelmakers' eagerness to procure scrap has prompted scrap suppliers to hold back on sales, expecting that prices will increase further, Mysteel Global learned. As of December 21, total inventories of construction steel scrap held by the 105 sampled recycling companies had increased by 2.7% on month to reach a near two-month high of 58,175 tonnes, according to Mysteel's tracking.

Written by Anthea Shi, shihui@mysteel.com

Edited by Russ McCulloch, russ.mcculloch@mysteel.com