Total stocks of processed and unprocessed steel scrap held by 584 licensed scrapyards across China continued trending upward for the fifth straight week over February 24-March 2, up by 3% on week or 9% on month, according to Mysteel’s survey. Chiefly responsible for the increase were scrapyards’ faster recycling and processing activities, together with their decision to hold off selling.
The scrapyards, all qualified by the country’s Ministry of Industry and Information Technology, were holding 1.4 million tonnes of processed and unprocessed scrap by March 2. Within the total, inventories of processed scrap were higher by 3% on week or 9.1% on month at 1 million tonnes, and those of unprocessed were up by 1.3% on week or 14.8% on month to 404,240 tonnes, the survey showed.
The fast resumption of scrapyard operations after the Chinese New Year holiday break and pleasant temperatures across the country since mid-February have prompted Chinese steel scrapyards to accelerate their pace of outdoor scrap recycling and processing, Mysteel Global understands.
Moreover, with the approach of “golden March” and “silver April” – usually peak months for steel trading and consumption in China, most scrap traders also chose to hold off selling to build up inventories, betting on better scrap demand from mills and higher scrap prices in the near term, according to the survey.
For now, the steady production among blast furnace (BF) mills and the increasing output from electric-arc-furnace (EAF) steelmakers have seen scrap consumption increase already, Mysteel Global noted.
For example, steel scrap consumption among the 211 BF and EAF mills nationwide under Mysteel’s other survey increased for the fourth straight week to near a nine-month high of 2.17 million tonnes as of March 2, higher by 13.9% on week or 57.4% on month.
As of March 8, Mysteel’s steel scrap price index edged up by Yuan 1.3/tonne ($0.2/t) on week or Yuan 18.2/t on month to Yuan 3,212.5/t on delivery and including the 13% VAT, according to the database.
Written by Lindsey Liu, liulingxian@mysteel.com
Edited by Alyssa Ren, rentingting@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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