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Chinese Steel Mills' Scrap Stocks Hit 10-Month High

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Melting Scrap
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24 Dec 2019, 09:40 IST
Chinese Steel Mills' Scrap Stocks Hit 10-Month High

Steel scrap inventories at the 61 Chinese steel plants including both blast furnace and electric-arc-furnace (EAF) producers Mysteel monitors weekly swelled for a sixth successive week last week, up by another 128,300 tonnes or 4.2% on week to reach a ten-month high of 3.2 million tonnes, according to Mysteel's latest survey published on December 20.

Survey respondents noted the concentrated deliveries to mills over the survey period which lifted stocks to a level sufficient to last the mills for 15.1 days of operations.

During the December 12-19 period, China's domestic prices for finished steel continued to tack downward and squeezed steel mills' profit margins further. This led domestic steel scrap traders to become active in unloading their stocks to customers, aiming to secure the prevailing margins while they can on anticipation of prices softening further this week, a steel scrap analyst in Shanghai said.

For example, the average daily volume of steel scrap channeled to steel mills in East China's Jiangsu province is hovering at a relatively high level of 17,000 tonnes/day, the Shanghai-based analyst shared.

Over the survey period, China's national average benchmark price for HRB 400 20mm dia rebar price continued to soften for an eighth straight working day, having lost another Yuan 94/tonne ($13.4/t) on week to Yuan 3,896/t including the 13% VAT as of December 20. On the same day, Mysteel's steel scrap price index nudged down by a tiny Yuan 2.8/t on week to Yuan 2,585.6/t including the VAT, Mysteel's data shows.

Nevertheless, domestic steel scrap demand from mills remains stable, as makers were still procuring scrap actively to build inventory reserves to tide them through winter, Mysteel Global notes. As a result, the firm demand will lend support for domestic steel scrap prices and keep them stable in the near term, Mysteel Global predicts.

This article has been published under an article exchange agreement between Mysteel Global and SteelMint.

24 Dec 2019, 09:40 IST

 

 

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