Mysteel’s steel scrap price index increased by Yuan 68.4/tonne ($10/t) on week to reach Yuan 2,679/t on delivery and including the 13% VAT as of November 6 – a 7.5-year high since April 28, 2013. The robust demand from steelmakers and the strengthening steel prices were what bolstered the price, Mysteel Global noted.
“Domestic steel scrap prices have been strengthening as many steel mills – especially those in East China – are operating as per normal,” a Shanghai-based market watcher commented. “They’re enjoying healthy profit margins as well as robust steel trading activities recently.”
As of November 6, China’s HRB 400 20mm dia rebar price, an indicator of market movement, had increased by Yuan 95/t on week to Yuan 3,955/t including the VAT, also a new high since last December 16.
On the other hand, Shagang Group (Shagang), China’s largest electric-arc-furnace (EAF) steelmaker in East China’s Jiangsu province, raised its steel scrap buying prices by Yuan 100/t effective from November 5, as reported. Shagang’s decision also gave a confidence boost to the scrap market and helped domestic scrap prices to keep strengthening, Mysteel Global noted.
Shagang’s rise was echoed by other mills aiming to attract more deliveries, with the result that total steel scrap stocks at the 61 Chinese steel plants Mysteel monitors weekly reversed up by 83,500 tonnes or 3.3% on week to 2.59 million tonnes as of November 5. This was sufficient to last the steel producers, both blast furnace (BF) and EAF mills, for 9.9 days at their present daily consumption rate, or 0.3 day longer than the previous week.
Meanwhile, besides steel scrap, prices of some other raw materials such as coke also showed signs of strengthening, thus lending further support for steel scrap prices to keep rising.
China’s national coke pricing index has continued the rise from mid-August and as of November 6, it was at Yuan 2,061.9/t including 13% VAT, up another Yuan 45.7/t on week and a new high since June 20, 2019, according to Mysteel’s assessment.
Written by Lindsey Liu, liulingxian@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint Research.
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