The stocks of processed and unprocessed steel scrap held by the 406 licensed steel scrapyards in China reversed down during April after the prior month’s increase, dropping by 5% from March. Chiefly responsible for the decrease was slower recycling activities in the market when procurement among domestic steelmakers was active.
By end-April, the scrapyards, all qualified by the country’s Ministry of Industry and Information Technology, were holding a total of 1.11 million tonnes of processed and unprocessed scrap. Within the total, inventories of processed scrap were lower by 4.6% on month at 796,400 tonnes, and those of unprocessed were down by 6.1% on month at 310,000 tonnes, the survey showed.
Significantly, the largest fall in stocks was among the 158 qualified scrap yards in East China whose scrap inventories edged down by 13% on month to 588,400 tonnes, Mysteel’s survey showed.
“In April, the resurgence of COVID-19 cases in many regions of China had significantly disrupted steel scrap collecting and processing activities, forcing some of these scrapyards to reduce or even halt operations,” a Shanghai-based market watcher observed.
“Therefore, though transportation was also disrupted by some local government measures to control the virus spread, stocks in scrapyards still failed to accumulate,” she added.
Moreover, by the end of last month, with the easing of transport holdups amid the improving virus situation, some steelmakers actively purchased scrap from traders, Mysteel Global noted, both for maintaining normal production and for replenishment for the Labor Day holiday over April 30-May 4.
In April, the limited scrap availability had also forced some domestic steel mills, particularly electric-arc-furnace (EAF) mills, to rein in output. Consequently, by end-April total steel scrap consumption among the 61 blast furnace and EAF makers Mysteel samples nationwide had edged down by 3.4% on month to 5.52 million tonnes, according to Mysteel’s assessment.
Written by Lindsey Liu, liulingxian@mysteel.com
This article has been published under an exchange agreement between MySteel Global and SteelMint.
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