Stocks of ferrous scrap at the 61 Chinese blast furnace and electric-arc-furnace (EAF) makers under Mysteel’s regular survey dropped for a third week by another 188,600 tonnes or 10% on week to 1.69 million tonnes as of February 2, a new low since early August 2022. Propelling the decline was steelmakers’ firm demand at a time when scrap availability remains under stress.
The existing stocks could sustain these mills’ daily operations for 12.4 days on average, or 1.2 days shorter than during the prior week.
“The recent fluctuations in steel prices and unrecovered relatively poor demand for their steel have placed the domestic steel mills under some pressure,” a Shanghai-based market watcher explained. “But at the same time, steel scrap demand has been firm due to steelmakers’ replenishment after the Chinese New Year holiday,” she observed.
On the other hand, despite the recovering demand for steel scrap, domestic scrap availability is still rather limited, as some scrap collectors have not fully returned to work, according to the market watcher.
“Nearly half of the scrap traders have resumed work, but current scrap deliveries from traders to mills still fall short of the steelmakers’ daily scrap requirements,” the Shanghai source explained.
Over January 28-February 2, scrap deliveries to the 61 steel mills under Mysteel’s regular survey including both blast furnace and EAF producers reversed up from five weeks of decline, jumping by 34.6% on week to average 1,549 tonnes/day, while daily scrap consumption among these mills was steady at a higher level of 1,996 t/d.
As a result, the rather limited supplies in the domestic scrap market supported the rise in scrap prices last week, with Mysteel’s steel scrap price index edging up by Yuan 9.2/tonne ($1.4/t) from January 28 to Yuan 3,178.2/t on delivery and including the 13% VAT by February 3, according to the database.
In contrast, China’s spot steel prices softened somewhat in the second half of last week, with the national price of HRB400E 20mm dia rebar dropping for a third successive day by February 3 to Yuan 4,289/t and including the VAT, lower by a total of Yuan 49/t from January 31.
Written by Lindsey Liu, liulingxian@mysteel.com
Edited by Zhenqi Yang, yangzhenqi@mysteel.com
Note: This article has been written in accordance with an article exchange agreement between Mysteel Global and SteelMint.
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