WEEKLY: China mills' steel scrap stocks at 10-month high

The total inventories of steel scrap piled at the yards of the 300 blast furnace (BF) and electric-arc-furnace (EAF) steel producers under Mysteel's tracking had increased by a marked 5.3% on week to reach 6.2 million tonnes as of December 27, touching the highest level since early February this year.

The northern region of the country saw the most significant growth in scrap stocks, where the BF mills were hurrying to complete their winter stocking for the feed materials, Mysteel Global noted. The mills in South China have largely finished their scrap replenishment for this winter.

During December 23-27, the total volume of steel scrap arriving at the 300 mills Mysteel tracks averaged 568,813 tonnes/day, higher by 14,837 t/d or 2.7% from the prior week.

Mysteel's assessment showed that the existing scrap stocks would be sufficient to last the 300 surveyed mills for 9.8 days at their current usage rate, longer by 0.3 day compared with the December 16-20 period. However, the turnover days last week were slightly fewer compared to the same week last December, since the steelmakers' scrap consumption continues to hover at a relatively high level this year, Mysteel's survey showed.

The daily consumption of steel scrap by the same 300 steel producers edged up by 1,420 t/d or 0.3% on week to 520,600 t/d, according to the survey.

Although most steelmakers have reined in their production in response to the lukewarm demand from end-users, some EAF mills have lifted their production recently after seeing their margins improve, Mysteel Global learned.

By December 27, for example, the 59 independent EAF steel mills under Mysteel's other tracking were losing an average of Yuan 45/tonne ($6.2/t) when selling their rebar, with the loss being slightly smaller than the Yuan 52/t recorded a week earlier.

The firm demand from steelmakers remains a support for domestic steel scrap prices, Mysteel Global noted. As of December 27, the country's national composite steel scrap price had edged up by Yuan 2.94/t or 0.1% on week to reach Yuan 2,609.84/t including the 13% VAT, Mysteel assessed.

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