Steel scrap inventories at the 61 Chinese steel plants Mysteel monitors weekly comprising both blast furnace and electric arc furnace (EAF) steelmakers continued to rise to hit a near one-year high of 3.74 million tonnes as of January 9, the highest since February 1 last year. This represented a week-on-week climb of 160,200 tonnes or 4.47% and marked the tenth successive weekly rise, according to Mysteel’s latest weekly survey.
Survey respondents noted that deliveries to mills over the survey period had lifted stocks to a level sufficient to last the mills for 19 days of operation, 1.3 days longer than the prior week.
During the same survey period, China’s domestic steel scrap price remained generally stable, with Mysteel’s steel scrap price index increasing by a tiny Yuan 1.4/tonne ($0.2/t) on week to Yuan 2,583.7/t on delivery to steel plants and including the 13% VAT as of January 10.
Over the past week, heavy snow had hit many regions of northern and eastern China, forcing local authorities to block some highways to reduce the risk of accidents, as reported. Consequently, the delivery of scrap to steel mills had been disrupted, which in turn lent support to domestic scrap prices and kept them firm, Mysteel Global noted.
For example, currently, the average daily volume of steel scrap channeled to steel mills in East China’s Jiangsu province is hovering at 3,085 tonnes/day, 5.23% lower than the previous week, a Shanghai-based analyst shared.
On the other hand, as only two weeks remain before the Chinese New Year (CNY) holidays over January 24-30, the steel mills’ campaign of scrap replenishment has gradually come to an end. Many EAF steel mills have stopped scrap procurement and some have even begun their CNY holidays already, Mysteel Global noted. At present, only some blast furnace mills needing to maintain normal production are still purchasing steel scrap.
For steel scrap traders, the thinning demand has not deterred them too much. The growing difficulty of collecting scrap as the winter’s cold sets in, and the higher logistics costs associated with this, have made these scrap traders stock up tonnage instead of lowering prices to clear their yards. The traders are aiming to have sufficient tonnage to sell when demand recovers after the CNY holiday, Mysteel notes.
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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