Mysteel Global: After stabilizing briefly during the previous week, Chinese ferrous scrap prices slid again last week, as the prices of finished steel and other steelmaking raw materials generally lost ground, Mysteel’s latest survey showed.
As of March 21, the country’s national composite steel scrap price had fallen by Yuan 25.4/tonne ($3.5/t) on week to reach Yuan 2,483/tonne including the 13% VAT, touching the lowest level since late September last year, according to Mysteel’s assessment.
By the same day, China’s spot price for HRB400E 20mm diameter rebar had also dropped by Yuan 59/t on week to Yuan 2,483/t, Mysteel assessed.
With the weakening of steel prices squeezing the profit margins of domestic steelmakers, the mills have been pressing their suppliers of raw materials, including iron ore, coke, and steel scrap, to lower their selling prices, Mysteel Global noted.
On the other hand, as domestic steelmakers including both blast furnace (BF) and electric-arc-furnace (EAF) mills were raising their production to meet recovering demand from end-users last week, this culminated in further growth in demand for steel scrap, Mysteel’s survey showed.
During March 17-21, the total consumption of steel scrap by the 300 BF and EAF steel producers under Mysteel’s tracking averaged 519,510 tonnes/day, rising by 2.1% from the previous week.
Over the same period, the total volume of steel scrap arriving at the same 300 steelmakers also increased by 1.8% on week to average 511,430 t/d, as the mills gradually lifted their procurement of feed materials, the survey results showed.
However, the pace of deliveries from scrap suppliers remained slightly slower than the rate at which the mills were consuming the scrap. Consequently, the total steel scrap inventories held by the 300 sampled BF and EAF steelmakers had nudged down 1% on week to 4.96 million tonnes as of March 21, according to Mysteel’s survey.
The existing stocks would be sufficient to last these mills for about eight days at their current usage rate, largely unchanged from the previous period, Mysteel assessed.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
Leave a Reply