Posted on 10 Aug 2023
China's steel scrap supply from the recycling of End-of-Life vehicles (ELVs) is expected to pick up this month as the impact of the extreme weather seen earlier in the month abates, Mysteel's latest survey has found. The enthusiasm for processing ELVs among domestic car scrapping and dismantling enterprises will also strengthen with prices of ferrous and nonferrous scrap stabilizing, the survey showed.
Last month, the volume of scrapped ELVs declined, mainly because July is a traditional slack month for both sales and recycling of automobiles, Mysteel Global learned.
During July, retail sales of passenger vehicles nationwide totalled 1.73 million units, lower by 8% on month, according to data released by the China Association of Automobile Manufacturers. Over the same period, the volume of ELVs processed among the 41 car scrapping and dismantling enterprises countrywide under Mysteel's coverage also dropped 9.1% on month to 15,108 units.
"Steel scrap markets across the country experienced high temperatures and intense rains in July, making it difficult for many traders to collect scrapped vehicles," a market watcher based in Shanghai explained. "Also, some traders left the market to take summer vacations last month," he added.
Meanwhile, the bitter competition among processing companies still exists in the market, Mysteel Global learned, and continues to disrupt ELV recycling activities. More vehicle scrapping and dismantling enterprises are being qualified by China's Ministry of Industry and Information Technology, intensifying competition among them as they vie for market share. This is resulting in market chaos and disrupting car recycling activities, as reported.
The arrival of cooler weather this month should provide a more favorable operating environment for ELV scrapyards and traders and should encourage more scrap market participants to resume their business, the market watcher predicted.
Besides, steel scrap prices rose overall during July and are likely to stabilize at a relatively higher level this month – a factor that may persuade ELV scrapping and dismantling firms to lift their operational rates, Mysteel Global noted.
As of August 8, Mysteel's steel scrap price index stood at Yuan 3,006.6/tonne ($419.7/t) including the 13% VAT, higher by Yuan 19.8/t on month, according to Mysteel's assessment.
Source:Mysteel Global
