Posted on 31 Oct 2023
The slide in China's steel scrap prices since late September continued during October 23-27 as steelmakers were still striving to shave production costs by reducing their buying prices of feed materials, Mysteel's survey showed.
As of October 27, Mysteel's national steel scrap price index dropped Yuan 44.3/tonne ($6.2/t) on week to near a five-month low of Yuan 2870.5/t including the 13% VAT.
"Chinese steelmakers were in no hurry to procure steel scrap because they had seen their scrap inventories rise steadily in previous weeks," a market analyst based in Shanghai noted. "And they continued pressing scrap suppliers to lower selling prices," he added.
Mysteel's survey data showed the total steel scrap inventories held by the 61 blast furnace (BF) and electric-arc-furnace (EAF) steel mills it tracks nationwide had risen for the third straight week by another 85,648 tonnes or 4.3% on week to reach 2.06 million tonnes by October 26, touching a five-month high.
The stock increase was mainly due to scrap dealers' rush to deliver their scrap to steel mills, Mysteel Global noted. During October 20-26, daily scrap deliveries to the 61 sampled steelmakers averaged 2,949 tonnes/day, hitting a seven-month high after a 59.3 t/d or 2.1% on-week rise, the survey showed.
Meanwhile, daily average scrap consumption at these mills climbed by 55 t/d or 2% on week to reach 2,739 t/d over the same period as more EAF mills lifted their production in response to the improved steel margins, according to Mysteel's survey.
Chinese prices of finished steel products rebounded markedly last week, with the national spot price of HRB400E 20mm dia rebar climbing to 3,855 t/d including the 13% VAT on October 27, higher by Yuan 38/t on week, Mysteel assessed.
This enabled most EAF mills to earn some money when producing steel during off-peak times for electricity, which encouraged more mills to resume production accordingly, Mysteel Global learned.
The capacity utilization rate among the 87 domestic EAF steelmakers under Mysteel's regular tracking had increased for the third straight week by another 1.32 percentage points on week to reach 51.96% during October 20-26.
Source:Mysteel Global
