Chinese steel scrap market sees reduced supply
2023-04-27 08:27:51 [Print]
BEIJING (Asian Metal) 27 Apr 23 - After continuous price declines for around five days, Chinese steel scrap market began to witness tight supply this week. On Wednesday the mainstream prices of steel scrap HMS 6mm in Liaoning and Guangdong stood at RMB2,650/t (USD383/t) and RMB2,670/t (USD386/t) Ex-VAT delivered D/P, both in line with Tuesday. Though the supply reduced, more steel mills began to slash consumption for steel scrap to cut production. Insiders predict steel scrap prices would level off in the coming week.
A consumer in Liaoning stated that they could buy around 800t of steel scrap in one day this week, while they could buy about 1,600tpd one week ago. Their purchasing price of steel scrap HMS 6mm stood at RMB2,650/t (USD383/t) Ex-VAT delivered D/P on Wednesday and he last bought around 50t of the material at RMB2,650/t (USD383/t) on Tuesday. "We have an inventory of roughly 8,000t at present, down by 4,000t from one week ago," he said, adding that they want to restock before the May Day holiday but suppliers remained inactive in selling after the sharp price decrease. As most steel mills reduced production to reduce losses while the supply of steel scrap remained tight, he is of the opinion that steel scrap prices would stabilize in the coming week.
The company owns an annual consumption capacity of 550,000t for steel scrap and consumed about 155,000t of the material so far this year, against 420,000t in 2022. It estimated the consumption amount would reach about 45,000t in April, similar to March.
A trader in Guangdong reported that he became reluctant to sell this week after prices dropped totally by nearly RMB250/t (USD36/t) in past five days. Now he has an inventory of nearly 1,000t, up by 300t from one week ago. He sold around 20t of steel scrap HMS 6mm at RMB2,670/t (USD386/t) Ex-VAT delivered D/P on Wednesday and last sold about 30t of the material at the same price on Tuesday. "We would bear a loss of nearly RMB100/t (USD14/t) by selling materials at current prices," he said, adding that though most steel mills remained inactive in production, they would have the requirement to restock before the May Day holiday. He predicts steel scrap prices would stop falling and keep flat in coming two days.
With a sales volume of nearly 20,000t in 2022, the company sold about 4,000t of steel scrap so far this year. Its sales volume would reach no more than 1,000t in April, down from 1,200t in March.
A consumer in Liaoning stated that they could buy around 800t of steel scrap in one day this week, while they could buy about 1,600tpd one week ago. Their purchasing price of steel scrap HMS 6mm stood at RMB2,650/t (USD383/t) Ex-VAT delivered D/P on Wednesday and he last bought around 50t of the material at RMB2,650/t (USD383/t) on Tuesday. "We have an inventory of roughly 8,000t at present, down by 4,000t from one week ago," he said, adding that they want to restock before the May Day holiday but suppliers remained inactive in selling after the sharp price decrease. As most steel mills reduced production to reduce losses while the supply of steel scrap remained tight, he is of the opinion that steel scrap prices would stabilize in the coming week.
The company owns an annual consumption capacity of 550,000t for steel scrap and consumed about 155,000t of the material so far this year, against 420,000t in 2022. It estimated the consumption amount would reach about 45,000t in April, similar to March.
A trader in Guangdong reported that he became reluctant to sell this week after prices dropped totally by nearly RMB250/t (USD36/t) in past five days. Now he has an inventory of nearly 1,000t, up by 300t from one week ago. He sold around 20t of steel scrap HMS 6mm at RMB2,670/t (USD386/t) Ex-VAT delivered D/P on Wednesday and last sold about 30t of the material at the same price on Tuesday. "We would bear a loss of nearly RMB100/t (USD14/t) by selling materials at current prices," he said, adding that though most steel mills remained inactive in production, they would have the requirement to restock before the May Day holiday. He predicts steel scrap prices would stop falling and keep flat in coming two days.
With a sales volume of nearly 20,000t in 2022, the company sold about 4,000t of steel scrap so far this year. Its sales volume would reach no more than 1,000t in April, down from 1,200t in March.
