Steel scrap market report April 2012
2012-05-04 17:52:17 【Print】
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Domestic steel scrap prices have had slight decline by RMB10-200/t in every region this month. In Jiangsu, steel scrap market runs steadily with certain steel mills lowering offers by RMB30-50/t. Mainstream prices of steel scrap in the region are at RMB3,310-3,330/t VAT included delivered. In Fujian, where electric furnace steel making is common, the prices have a subtle decrease. Mainstream prices of burden fines and HMS are at RMB2,730-2,750/t and RMB2,700-2,720/t respectively, all on VAT excluded delivered by cash payment basis. In addition, steel scrap prices present different decline ranges in Tianjin, Shandong, Hebei and Liaoning.
Reasons accounting for the price decline are as follows.
Firstly, as downstream products of steel scrap, steel products are lack of price support with weak deals in the market. Demand for steel from end-users is also lackluster. Discouraged by policy, real estate needs little amount of steel products, building materials in particular, with low operating rates. In addition, domestic railroading has been working with low operating rates since the beginning of this year and hence its demand for steel decreases. Affected by the two factors above, overall demand for steel is at low level and finished steel sale has no increase with serious loss in many domestic steel mills. They are also the critical factors that bring about price decline.
Secondly, in earlier April, domestic output of crude steel reached new record with daily capacity of 2.0308 million tons, up by 8.9% compared with the average daily capacity of 2011. Despite slight decrease, daily output was still as high as 2 million tons in mid-April. Therefore, crude steel was oversupplied with weak demand for finished steel and stagnant deals. That in turn depresses prices of raw materials like steel scrap.
Reasons accounting for the price decline are as follows.
Firstly, as downstream products of steel scrap, steel products are lack of price support with weak deals in the market. Demand for steel from end-users is also lackluster. Discouraged by policy, real estate needs little amount of steel products, building materials in particular, with low operating rates. In addition, domestic railroading has been working with low operating rates since the beginning of this year and hence its demand for steel decreases. Affected by the two factors above, overall demand for steel is at low level and finished steel sale has no increase with serious loss in many domestic steel mills. They are also the critical factors that bring about price decline.
Secondly, in earlier April, domestic output of crude steel reached new record with daily capacity of 2.0308 million tons, up by 8.9% compared with the average daily capacity of 2011. Despite slight decrease, daily output was still as high as 2 million tons in mid-April. Therefore, crude steel was oversupplied with weak demand for finished steel and stagnant deals. That in turn depresses prices of raw materials like steel scrap.
