Posted on 20 Jun 2023
Chinese prices of steel scrap under Mysteel's tracking continued to make ground during the June 9-16 week thanks to improved scrap-market fundamentals. Market sources noted that coinciding with the rise in finished steel prices, scrap demand from steelmakers had stayed steady while supply remained tight.
As of June 16, Mysteel's steel scrap price index had increased by Yuan 39.8/tonne ($5.6/t) on week to reach Yuan 2,959/t on delivery and including the 13% VAT, according to the database.
Improving sentiment continued to prevail in China's steel market following the strengthening of steel derivatives prices, Mysteel Global noted, which in turn gave a lift to finished steel prices and helped prices of raw materials including steel scrap move higher.
As of June 16, the average price of HRB400E 20mm dia rebar across China, for example, had increased by Yuan 57/t on week to Yuan 3,884/t and including the 13% VAT, Mysteel's data showed.
On the other hand, the firmer steel prices also improved the profit margins of domestic steelmakers and gave them confidence to keep producing or even ramp up production. Moreover, some steelmakers also purchased additional scrap cargoes for maintaining normal production during the country's upcoming Dragon Boat Festival holiday over June 22-24. Both contributed to their increasing demand for scrap, Mysteel Global noted.
In tandem, over June 9-15, daily scrap consumption among the 61 Chinese blast-furnace and electric-arc-furnace steel producers under Mysteel's weekly survey increased by 2.7% on week to average 2,640 tonnes/day.
At the same time, scrap deliveries to the 61 sampled mills hovered at a lower level of 2,577 t/d. Market watchers said the limited scrap availability in the market amid the hot weather and frequent rains had dragged down the pace of scrap delivery.
As a result, total scrap stocks at the 61 surveyed mills had edged down for the seventh straight week by another 27,300 tonnes or 1.4% on week to 1.91 million tonnes as of June 15, refreshing a new low since mid-February. The mills' existing stocks were sufficient to last them for 10.4 days at their daily consumption rate, or 0.2 day less than in the prior week.
Source:Mysteel Global
