The downward trend in scrap steel prices narrowed the profit margins of steel companies, leading to reduced purchasing intentions. Particularly with the fluctuation in steel prices, variability in scrap steel consumption was observed.
In April, as steel prices stabilized, an eighth round of price cuts was implemented in coke prices, leading to a slight recovery in the profit margins of steel companies. However, influenced by the improving market conditions, scrap steel traders showed reluctance in shipping, opting to continue monitoring the market. Trading volume for scrap remained low, and some steel companies had limited demand for replenishing their stocks.
However, despite continuous fluctuations in final product prices, it was observed that terminal demand did not recover as expected, and the price differential between hot metal and scrap steel reversed. This indicates that it is not cost-effective for long-process steel producers to use scrap, and some are still operating at a loss.
Although increasing scrap steel consumption poses a challenge, it is expected that the local scrap market will undergo consolidation in the short term, with limited price increases.
In Eastern China, prices stabilized, prompting some steel companies to replenish their stocks. Major producers like Nanjing Iron and Steel, Shagang, and Maanshan Iron and Steel offered purchase prices ranging from 2,700 to 2,760 yuan/ton (373-381 USD) for heavy scrap.
In Central China, prices initially fell but then rose again. Steel companies operated with a production volume lower than daily consumption. Firms like Angang, Wugang, and Wuhan Iron and Steel offered price quotes ranging from 2,390 to 2,880 yuan/ton (330-398 USD) for heavy scrap.
In Southern China, prices also rose, but surplus supply eased the tightness in the market. Producers like Sanzang Minguang, Shaogang, and Lianzhong Steel offered purchase prices ranging from 2,660 to 2,680 yuan/ton (367-370 USD) for heavy scrap.
Overall, the scrap steel market experienced sluggishness in April. Price fluctuations and low trading volume contributed to market uncertainty. Reduced profit margins for steel companies led to decreased demand for scrap purchases. In the short term, scrap steel prices are expected to stabilize with limited increases.
According to Steel Radar's assessment, as of April 15, Chinese scrap prices were recorded at 377.00 USD.
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