Posted on 09 Nov 2023
Heavy snow falls over parts of northern China starting on Monday have forced many steel scrap processers and dealers to temporarily stop their businesses, with snowdrifts seriously hampering local logistics and outdoor operations, a new Mysteel survey has found.
Steel scrap processing companies in Northeast China's Heilongjiang province are being hit the hardest by the weather event, where the volume of snow deposited on some areas have touched historical highs, the survey results showed, with scrapyards in Heilongjiang's capital city Harbin expected to suspend work for around a week.
"There's basically no scrap arriving at our yard because the highway is closed, and scrap processing cannot proceed because our electric power system has failed," an officer at a scrapyard in Heilongjiang said. On Tuesday, CCTV footage showed a 1-km line trucks stranded outside Harbin due to the snow.
In fact, among the 220 domestic steel scrapyards under Mysteel's daily tracking nationwide, the total volume of steel scrap arriving at Northeast China yards on November 7 had hit a more than two-month low of just 2,350 tonnes, slumping 40.5% from November 5.
"Usually, Northeast China does not experience the season's first snowfall until late November," a market watcher based in Shanghai said. "This winter's first snow has come early and in some quantity, and will likely drag the local scrap market into its traditional winter lull much sooner than in other years," she warned, adding that scrap prices may weaken there as a result.
Meanwhile, in North China's Inner Mongolia, most steel scrapyards in the eastern areas of the autonomous region were planning to halt operations for 3-4 days from November 6 owing to transport disruptions caused by heavy snow, Mysteel's survey showed.
On the other hand, the decline in scrap deliveries is not causing any anxiety for local steelmakers because they have sufficient scrap stocks, while their scrap consumption is slow, according to the survey.
"Currently, nearly half of the steel mills in Inner Mongolia have no plan to procure steel scrap as they have already reduced or halted steel production in response to the weak demand from local end-users," the Shanghai market watcher noted.
Source:Mysteel Global
