The stocks of processed and unprocessed steel scrap held by the 293 licensed steel scrapyards in China reversed down after two months of inclines during August, decreasing by 4.6% on month. Chiefly responsible for the decrease was slower recycling activities in the market plus the dealers’ faster pace of delivering scrap to mills, according to Mysteel’s latest survey.
As of August 30, the yards – all of which are qualified by the country’s Ministry of Industry and Information Technology – were holding 998,710 tonnes of processed and unprocessed scrap. Within the total, inventories of processed scrap were lower by 6.2% on month at 651,142 tonnes, while those of unprocessed remained stable at 347,568 tonnes, or nudging down by a tiny 0.1% from July, the survey showed.
“In August, the rain and hot weather, as well as the resurgence of COVID-19 cases across the country, had largely disrupted steel scrap collecting and recycling activities,” a Shanghai-based market watcher explained.
Meanwhile, Beijing’s orders to trim crude steel output for the rest of this year, together with power supply shortages in southern areas of China, also fuelled market concerns about domestic steel market conditions going forward, according to her. They also cooled the domestic mills’ interest in producing steel, not to mention procuring steel scrap.
In August, total steel scrap consumption among the 61 steel mills Mysteel samples nationwide including both blast furnace and electric-arc-furnace (EAF) plants decreased for the third straight month by another 9.3% on month to 6.16 million tonnes as of August 30, according to Mysteel’s assessment.
The significant decrease in steelmakers’ scrap consumption saw Mysteel’s steel scrap price index soften too by Yuan 35.2/tonne ($5.4/t) on month as of August 31 to Yuan 3,709.8/t on delivery and including the 13% VAT, the database shows.
Consequently, after noting the mills’ weakening demand and falling scrap prices, most scrap traders sped up their pace of deliveries to customers in case of further price declines, the survey found.
Written by Lindsey Liu, liulingxian@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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