Mysteel Global: After rising firmly in August, Chinese prices for ferrous scrap are expected to fluctuate within a narrow range in September, with steel scrap supply and demand both expanding marginally, according to Mysteel’s latest report on the market.
Last month, domestic steel scrap prices were driven steadily higher by growing scrap consumption among steel mills. By August 29, the country’s national composite steel scrap price was at RMB 2,395/tonne (t) ($335/t) under Mysteel’s assessment, higher by 1.5% from the end of July. Entering this month though, the price had slid to RMB 2,387/t ($335/t) by 3 September.
In September, scrap demand among blast furnace (BF) steel mills is expected to rise further, as steel scrap has become more cost effective than hot metal as a steelmaking raw material, as reported.
By 3 September, for example, the cost of producing steel using steel scrap among integrated mills in East China’s Jiangsu province averaged RMB 2,123/t ($297/t) excluding the 13% VAT, lower by some RMB 64/t ($9/t) compared with using hot metal, according to Mysteel’s assessment.
The firm demand is expected to underpin domestic prices for steel scrap this month, Mysteel’s survey suggests.
However, the upward momentum in prices may be weakened by increasing steel scrap supply, according to the report.
“The weather across China will gradually cool this month as autumn sets in, allowing domestic steel scrap processors to expedite their collecting and processing work,” Mysteel’s report commented, noting that the tightness of steel scrap availability is likely to ease in September.
In fact, steel scrap suppliers have watched their scrap inventories begin mounting recently, with the total stocks of processed and unprocessed steel scrap held by the 584 Chinese steel scrapyards qualified by country’s Ministry of Industry and Information Technology standing at 971,040 t by the end of August, higher by 1% on month, according to Mysteel’s tracking.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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