Recent domestic scrap prices rose steadily

Recently, the domestic scrap market has maintained a steady and favorable trend of operation with active trading in the market. The prices of scrap in some areas have been rising steadily. Operators have been looking forward to the market outlook but are not blindly optimistic and mostly cautious about the existing Uncertainties affecting the market are more concerned.
These factors are mainly reflected in several aspects:
First, the heating season steel companies limited production, the demand for the scrap market or will produce changes. November 15, the implementation of the heating season in the northern region a comprehensive limited production initiatives, long duration, wide area, strict measures. November 3, Beijing, Tianjin and other places have issued orange warning of heavy pollution weather, the local steel companies are limited production, limited production is mainly blast furnace. Hebei Tangshan Municipal Government Office issued “Tangshan 2017 ~ 2018 heating season iron and steel industry peak production plan”: November 15, 2017 to March 15, 2018 blast furnace limited production of iron and steel enterprises 120 days, the city’s total capacity constraints For 50%, 4 months together affect the total amount of blast furnace pig iron 18210000 tons. The move has a positive impact on the scrap market, but also on the negative side, overall positive is better than negative. Limited capacity of the blast furnace, some steel mills and converters to release capacity, increase production to make up for lack of resources caused by the limited capacity of the blast furnace, thus increasing the demand for steel scrap.
Second, iron ore, coke and other raw materials prices shocks on the coke market conditions. Recently, iron ore, coke prices have been shock down, the cost of molten iron decreased significantly, and now the cost of scrap and hot metal opened more than 300 yuan / ton gap, some mills for the continued rise in scrap resources in the procurement More cautious than the previous period, and some mills to “control the price” strategy, cut scrap purchase prices.
Third, changes in the scrap market for resources and the impact of downstream end-user purchase policy adjustments on the market outlook. Recently, the supply of scrap steel in some areas has been tight. As the prices of scrap in the previous period continued to rise, the steel mills purchased more scrap at the psychological control of “buying or not buying.” Some steel preparation Jiancang, operators significantly reduce the inventory. In the northern region, fog and haze were encountered, transportation was affected, and scrap resources in some areas were scarce. This year, China’s scrap exports have risen sharply. As a result, the supply of domestic scrap steel has experienced a period of tightness. In addition, in the winter, some iron and steel enterprises consider “winter storage” to supplement scrap inventories and adjust their procurement prices so as to organize their resources in time.
Fourth, changes in mentality of scrap operators impact on the market outlook. Due to tight resources in the scrap market, operators cherished reluctant sellers, coupled with the impact of rising prices on motorcycles and shipping fees, rising scrap scrap recycling costs and the willingness of merchants to “stand up so much” are still strong.
Judging from the above factors, the market for scrap steel will not be subject to ups and downs in the short term given the demand and the problem of tax stamps can not be solved.
(This article published in the “China Metallurgical News” November 29, 2017 7 version)

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Post time: Nov-29-2017
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