WEEKLY: China ferrous scrap prices at 3-month low

Mysteel Global: Chinese prices of ferrous scrap dropped rapidly last week as scrap demand among steelmakers continued to wane while at the same time scrap availability was loosening, the findings of Mysteel's latest survey showed.

As of January 10, the country's national composite steel scrap price was assessed by Mysteel at a three-month low of Yuan 2,507.35/tonne ($341.9/t) including the 13% VAT, down by Yuan 84.63/t or 2.8% from a week earlier.

Most steelmakers across China have accumulated sufficient stocks of steel scrap to help them smoothly tide through the Chinese New Year (CNY) holiday over January 27-February 4, so their buying interest in scrap materials cooled, Mysteel Global noted.

By January 10, the total inventories of steel scrap held by the 300 blast furnace (BF) and electric-arc-furnace (EAF) steelmakers under Mysteel's tracking was 6.8 million tonnes, higher by 336,900 tonnes or 5.2% on week. This would be sufficient to last them for 10.5 days at their current usage rate, longer by 0.3 day from the previous period.

As the CNY holiday mood has started to dominate the domestic steel market, steelmakers are continuing to rein in production, leading to a decrease in the immediate demand for scrap as well, according to the survey. During January 6-10, the daily consumption of steel scrap by the 300 BF and EAF steel mills Mysteel tracks dropped by 0.5% on week to reach 513,330 tonnes/day.

However, steel scrap suppliers were trying to reduce their scrap stocks before the CNY by rushing deliveries to steelmakers, the survey results showed. Consequently, the total volume of steel scrap arriving at the same sampled 300 mills averaged 562,217 t/d over January 6-10, higher by 8,688 t/d or 1.6% on week.

This prompted many steelmakers across the country to cut their scrap purchase prices aggressively, intending to press scrap suppliers to slow their deliveries, Mysteel Global learned

Shagang Group, the leading electric-arc-furnace (EAF) steelmaker headquartered in East China's Jiangsu, pared its ferrous scrap buying prices twice last week by a total of Yuan 80/t during, as reported.

Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.