Market Update: Scrap Steel Prices

Overall Market Trends

Last week, the domestic scrap steel market continued to fluctuate and showed weakness. Merchants remained cautious with low enthusiasm for operations. Steel companies purchased on demand, and consumption stayed low. The average purchase price for key steel companies was down by 21 yuan/ton for heavy scrap, 19 yuan/ton for medium scrap, and 21 yuan/ton for general scrap compared to the previous week.

Market Influences and Company Responses

The ongoing decline in the futures market and finished steel prices hurt market confidence and steel company profits. To reduce costs, some steel companies lowered their scrap steel purchase prices again. Lower prices made it harder for bases to receive goods. High temperatures and rainy weather further reduced scrap steel processing and slowed merchant shipping, leaving steel company inventories low. Without significant macroeconomic policy changes to boost demand and market confidence, the domestic scrap steel market is expected to remain weak, though major price drops are unlikely.

Regional Market Analysis

East China The market continued to weaken with moderate goods receipt at bases. Steel companies faced significant cost-reduction pressure, reducing their enthusiasm for scrap steel purchases.

Nangang: 2,740 yuan/ton, down 30 yuan/ton
Shagang: 2,800 yuan/ton, down 30 yuan/ton
Xingcheng Special Steel: 2,860 yuan/ton, down 50 yuan/ton
Magang: 2,580 yuan/ton
Tongling Fuxin: 2,880 yuan/ton, down 100 yuan/ton
Shandong Steel Laigang: 2,800 yuan/ton
Ningbo Steel (June): 2,633 yuan/ton

Central China The market was stable with tight supply. Scrap steel was less cost-effective compared to molten iron, so steel companies continued on-demand purchases.

Angang: 2,930 yuan/ton, down 30 yuan/ton
Wugang: 3,060 yuan/ton
Hunan Iron and Steel Henggang: 2,450 yuan/ton, down 40 yuan/ton
Wuhan Iron and Steel: 2,910 yuan/ton for low-sulfur briquetted scrap

South China The market was in consolidation, with fast in-and-out operations by merchants. Independent electric arc furnace steel companies faced serious losses and low production enthusiasm.

Sangang Minguang: 2,800 yuan/ton
Shaoguan: 2,570 yuan/ton, down 30 yuan/ton
Angang Lianzhong: 2,850 yuan/ton, down 70 yuan/ton

Southwest China Prices fluctuated due to high temperatures and rainy weather, tightening supply. Some electric arc furnace steel companies halted production due to significant losses.

Chongqing Iron and Steel: 2,540 yuan/ton, down 40 yuan/ton (tax-free)
Kunming Iron and Steel: 2,640 yuan/ton, up 30 yuan/ton

Northwest China Prices were stable with slight declines. Merchants operated cautiously, and steel enterprises showed low enthusiasm for production and procurement.

Xining Special Steel: 2,685 yuan/ton, down 40 yuan/ton
Jiugang: 2,550 yuan/ton for medium-sized scrap

Northeast China Prices faced a dilemma of rising and falling. Slow shipment speeds and low cost-effectiveness of using scrap steel for smelting hindered increased consumption.

Jianlong Xigang (Yichun area): 2,689 yuan/ton
Angang: 2,910 yuan/ton, down 50 yuan/ton
Fushun Special Steel: 2,860 yuan/ton

North China The market was weak with a wait-and-see attitude. Lower purchase prices by steel companies led to decreased arrival volumes.

Shougang Qiangang: 2,930 yuan/ton, down 30 yuan/ton
Tianjin Steel Pipe: 2,910 yuan/ton for heavy type II scrap
Baosteel: 2,882 yuan/ton for medium scrap, down 66 yuan/ton
Hegang Shigang: 2,665 yuan/ton (tax-free), down 9 yuan/ton

Kesimpulan

The domestic scrap steel market remains weak, influenced by fluctuating prices and cautious merchant operations. Regional variations reflect local market dynamics and cost pressures. In the short term, without significant policy changes to boost demand, the market is expected to see limited price declines.