Stocks of steel scrap at 61 Chinese steel mills including both blast furnace and electric-arc-furnace (EAF) makers under Mysteel’s regular survey decreased for the seventh straight week by another 89,300 tonnes or 3.7% on week to 2.3 million tonnes as of April 21, or a new low since July 2020. Propelling the decline in scrap stocks was mills’ firm consumption and remaining low scrap deliveries.
Based on their present utilization rate, the mills’ existing stocks will be sufficient for 12.1 days of their daily use, or 0.2 day less than in the previous week, Mysteel’s survey results indicated.
“Last week, the pace of price increase in finished steel was faster than that in steel scrap, and this improved some steelmakers’ profit margins and thus encouraged them to maintain steady production or even to ramp up production,” a Shanghai-based market watcher commented.
As of April 22, Mysteel’s steel scrap price index nudged down by Yuan 10.9/tonne ($1.7/t) on week to Yuan 3,906.2/t on delivery, while the national price of HRB400E 20mm dia rebar increased by a larger Yuan 20/t on week to Yuan 5,135/t, both including the 13% VAT, according to Mysteel’s database.
By April 21, the capacity utilization rate among 85 independent Chinese EAF steel producers under Mysteel’s other survey increased for the second week by another 2.93 percentage points on week to 66.63%.
On the other hand, scrap deliveries from traders to mills still hovered low despite the mills’ stable scrap consumption, mainly due to COVID-induced transportation disruptions in many regions across China, Mysteel Global noted.
In tandem, over the week of April 15-22, scrap deliveries to the 61 surveyed steel mills edged down by 6.9% on week to average 2,859 tonnes/day, while their daily scrap use remained largely stable at 3,077 t/d, 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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