The stocks assessment represented a week-on-week climb of 50,920 tonnes or 2.3% and marked the seventh successive weekly rise. The total tonnage would be sufficient for 14.3 days of consumption among the sampled mills at their present daily utilization rate, or 0.7 day longer than in the prior week, according to the latest weekly survey.
With only two weeks remaining before the CNY holiday, the steel mills, especially EAF mills, have gradually ended their scrap replenishment campaigns. Moreover, as the climb in scrap prices over the past two weeks has further added to the EAF mills’ production costs – with some makers still losing money – more EAF firms have withdrawn from the market to enjoy longer CNY holiday breaks, Mysteel Global noted.
Accordingly, the capacity utilization rate among the 85 independent EAF mills nationwide under Mysteel’s other survey decreased by 13.2 percentage points on week to just 31.56% as of last Thursday.
On the other hand, some domestic BF mills still have a steady appetite for steel scrap, Mysteel Global observed. “Though some BF mills are also enduring thinning margins or losses, they have yet to plan major overhauls of their steelmaking facilities, so their demand for some raw materials including scrap remains steady,” a Shanghai-based market watcher commented.
Over December 30-January 5, scrap deliveries from traders to the 61 sampled mills decreased by 2.3% on week to average 2,452 tonnes/day, while the mills’ scrap consumption decreased too by 1.8% on week to average at a lower level of 2,331 t/d, according to Mysteel’s assessment.
As of January 6, Mysteel’s steel scrap price index had moved up by Yuan 58/tonne ($8.5/t) on week to Yuan 3,159.6/t on delivery and including the 13% VAT, the data showed.
Written by Lindsey Liu, liulingxian@mysteeel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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