The decline in demand for steel scrap from large steel companies has led to a significant drop in prices. For example, prices for heavy scrap fell by 11 yuan/tonne (USD 1.52), while prices for medium scrap fell by 14 yuan/tonne (USD 2).
Demand for steel continues to weaken due to the off-season. The decline in forward and spot prices is squeezing steel companies' profit margins and causing them to be cautious when purchasing materials. On the scrap market, available resources are scarce as many mills have limited purchasing and overall stock levels are low. In addition, high temperatures are reducing the efficiency of scrap processing, leading to short-term supply problems and supporting scrap prices. Fluctuations within a narrow range are therefore expected on the domestic scrap market.
The scrap market in eastern China was initially strong and then weak. The deterioration in market confidence and the decline in processing volumes limited the fall in prices.
Changes were observed in the purchase prices of heavy scrap from companies such as Nanjing Iron and Steel and Shagang. The market in central China is weak. Traders are keeping their inventories low to avoid risks. Steel companies' scrap purchases have declined due to weather conditions. The prices of companies such as Angang and Wuhan Iron and Steel have fallen.
In southern China, the scrap market fluctuates within a narrow range. Supply is limited, but the willingness of steel companies to raise prices is low.The prices of Sansteel Minguang and other companies have fallen.
In northwest China, the market is stable but weak. Traders are cautious and steel companies' scrap consumption has declined. The prices of companies such as Xining Special Steel and Jiugang have fallen.
In northern China, scrap prices initially rose and then fell. Business confidence is weak and demand from steel companies is at an average level. The prices of Shougang Qiangang and Baotou Steel have changed.
In China, scrap prices fluctuate between 2,550 yuan/tonne (USD 351) and 2,900 yuan/tonne (USD 399). Due to regional differences and the general weakness of the market, prices on the Chinese scrap market continue to fluctuate within a narrow range. The direction in which the market will develop in the near future depends on the balance between supply and demand.
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