Posted on 04 Jul 2023
The recovery in domestic steel prices and the steady demand for feed materials from steel mills led ferrous scrap prices across China to keep rising during June 26-30, with Mysteel's steel scrap price index edging up by Yuan 13.7/tonne ($1.9/t) from June 26 to reach Yuan 2,957.5/t on delivery by June 30 including the 13% VAT.
Last week, domestic finished steel prices increased further, with the uptick lending some support to steelmaking raw materials prices including those of steel scrap. As of June 30, China's national average price of HRB400E 20mm dia rebar under Mysteel's assessment, for example, had gained by a large Yuan 54/t from June 26 to reach Yuan 3,855/t and including the VAT.
The faster pace of the increases in steel prices compared with those of scrap also offset some of the losses that domestic blast furnace (BF) and electric-arc-furnace (EAF) producers had been recording and encouraged them to resume operation, Mysteel Global noted. This too led their demand for scrap to firm.
The capacity utilization rate of the 87 independent EAF steel mills across China as of June 29 had increased for the third straight week, rising by a small 0.55 percentage point on week to 51.32%, Mysteel's data showed.
Over the survey period of June 23-29, daily scrap consumption among the 61 Chinese BF and EAF mills under Mysteel's other survey increased by 3.1% on week to average 2,730 tonnes/day, while deliveries of scrap to these surveyed mills increased too by 5.1% on week to average 2,849 t/d.
As a result, as of June 29 ferrous scrap stocks at the 61 mills had increased for the fourth week by another 52,700 tonnes or 2.7% on week to 1.98 million tonnes. This was sufficient to last the mills for 11 days at their present daily rate of consumption, or 0.2 day longer on week, according to Mysteel's assessment.
Nevertheless, market watchers also warned that actual steel demand from end-users remains weak as China's hot and humid summer weather has arrived, another factor that will weigh on steel and raw material prices.
Source:Mysteel Global
