Stocks of steel scrap including both processed and unprocessed at the 406 licensed scrapyards across China under Mysteel’s regular survey decreased for the second month in May, dropping by 9.2% from April. Survey respondents cited a further slowdown of recycling activities in the market as well as accelerated deliveries from the scrapyards to explain the decline.
By end-May, the scrapyards, all qualified by the country’s Ministry of Industry and Information Technology, were holding a total of 1.07 million tonnes of processed and unprocessed scrap. Within the total, inventories of processed scrap were lower by 4.5% on month at 797,300 tonnes, and those of unprocessed were down by a large 20.7% on month at 261,600 tonnes, the survey showed.
In May, the ongoing COVID emergency in many regions of China continued to challenge steel scrap collecting and processing activities, resulting in most scrapyards’ rather low scrap stocks at hand, according to the survey.
Besides the limited scrap availability, the recent slumps in the country’s finished steel prices amid the lukewarm downstream steel demand since mid-May also saw domestic steel scrap prices edge down.
For example, as of May 31, China’s HRB 400E 20mm dia rebar price had plunged by Yuan 305/tonne ($45.6/t) on month to Yuan 4,786/t, while the national steel scrap pricing index lost ground too, falling by Yuan 138.5/t on month to Yuan 3,754.7/t, both including the 13% VAT, both according to Mysteel’s assessment.
During May, Shagang Group, the country’s leading EAF producer in East China’s Jiangsu province, clipped its scrap procurement prices no fewer than three times by a total of Yuan 200/t in response to lower domestic steel prices.
Their concerns about further price declines led domestic scrap traders and scrapyards to take a fast-in, fast-out stance on stocks, speeding up their pace of delivering scrap to mills to maximize their profits, according to a Shanghai-based market watcher.
Written by Lindsey Liu, liulingxian@mysteel.com
This article has been published in accordance with an article exchange agreement between Mysteel Global and SteelMint.
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