The stocks of processed and unprocessed steel scrap held by China’s 283 licensed steel scrapyards had grown by another 15% on month as of September 25, according to Mysteel’s latest survey. Chiefly responsible for the rise were an increase in recycling activity in the market and active procurement among scrap dealers responding to weaker scrap prices in late September.
As of September 25, the scrap yards – all qualified by the country’s Ministry of Industry and Information Technology – were holding 1.53 million tonnes of processed and unprocessed scrap, up for a second month by 15%. Within the total, inventories of processed scrap were higher by 20.4% on month at 967,000 tonnes, and those of unprocessed were up by 7% on month at 570,600 tonnes, the survey showed.
“September is appropriate for steel scrap recycling and processing because the weather is mild. Also, with the recovery of China’s economy, the improvement in auto-manufacturing has resulted in more return scrap including new cut material becoming available, which helped to ease the supply tightness of scrap,” a Shanghai-based market watcher explained.
Another factor behind the improved availability of scrap is scrapyards’ active buying, especially after the recent decrease in domestic scrap prices. “We reduced our offering prices to local scrap suppliers in line with the recent weakening of scrap prices,” explained an official from a scrapyard in East China’s Jiangsu province. “It’s a good opportunity for us to collect more scrap material at lower prices,” he told Mysteel Global.
On the other hand, although both domestic scrap and rebar prices have shown signs of weakening, most electric-arc-furnace producers can still enjoy some healthy profits, and this is encouraging them to maintain normal production.
In tandem, China’s scrap usage has been hovering at a relatively high level, with steel scrap consumption this month among the 61 Chinese blast furnace and EAF steelmakers quizzed for another Mysteel survey increasing to 6.1 million tonnes as of September 25, up 1.8% on month or 9.4% on year.
As of September 28, Mysteel’s steel scrap price index had decreased by Yuan 38.9/tonne ($5.7/t) on week to Yuan 2,555.6/t on delivery and including the 13% VAT, Mysteel’s data shows.
This article has been published under an article exchange agreement between Mysteel Global and SteelMint Research.
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