Last week, the national scrap steel market fluctuated downward as a whole. Affected by the interest rate hike by the Federal Reserve, the global bulk commodities were under pressure and the futures market performed poorly. Last week, the average billet in Qian’an area of Tangshan has been reduced by 370 yuan so far, and the ex-factory tax is reported to be 3,500 yuan/ton. . The finished product fell off a cliff, and the profits of steel mills narrowed rapidly, dragging down the scrap market. Last week, the scrap purchase price was generally lowered. Last Monday, the average price of heavy waste 6mm in mainstream cities across the country fell from 2690 to today’s average price of 2220, a cumulative decline of 470 yuan /Ton. As of this week, the decline in scrap prices of steel mills has slowed down, and some individuals have risen slightly, but the overall price has remained stable and weakened.
Steel mills: As of July 15, Mysteel surveyed 85 independent electric arc furnace steel mills across the country, and the average operating rate was 42.56%, up 0.21% month-on-month and down 37.24% year-on-year. The average capacity utilization rate of 85 independent electric arc furnace steel mills was 31.89%, up 0.22% month-on-month and down 44.07% year-on-year. This week, the capacity utilization rate and operating rate of independent electric arc furnaces across the country rebounded slightly.
The main factor is that the price of raw materials has fallen faster, the snail waste gap has improved compared with the previous period, and some manufacturers have resumed production slightly, but most of them still maintain an unsaturated production state. Entering next week, the price of finished products is still in a downward channel, and it is difficult to fundamentally reverse the profitability of steel mills in the short term. Only a few manufacturers have a slight resumption of production. Therefore, it is expected that the capacity utilization rate and operating rate of independent electric arc furnace plants may continue to be narrow next week. Amplitude adjustment.
Market: Affected by the wide drop in scrap steel prices in the early stage, the overall pessimism of merchants is strong, shipments are accelerated, losses are reduced, and the base inventory is transferred to the steel mill inventory. Some bases said that the price is lower, the market wool is difficult to receive, and there is no profit, and the willingness to operate is low. Most of them follow the market. The steel billet rose slightly over the weekend, and the shipments of individual merchants slowed down.
Regarding last week’s steel mill scrap inventory and related arrivals, our website has also done research and statistics:
As of July 14, the total scrap inventory of my 61 steel mills was 2,149,600 tons, an increase of 86,800 tons or 4.21% from last week; the turnover days were 13.1 days, down 0.2 days from last week. This week, the average daily scrap arrival volume of My Steel’s 61 steel mills was 2569.33 tons, an increase of 8.22% compared with last week; the average daily consumption was 2369 tons, a decrease of 0.8% compared with last week. Judging from the above data, although the inventory of steel mills has increased last week, it is still at a low value during the year, and is lower than the level of the same period of previous years, and the daily consumption is also lower than the level of the same period of last year. At present, the profit is shrinking sharply, and the consumption still has room for decline. . After the steel mills lowered the purchase price of scrap steel by a wide margin, under the circumstance that the shipments from the processing bases accelerated, the arrivals of the steel mills also increased, and the social inventory was transferred to the steel mill inventory, which further suppressed the scrap steel price. In the short term, scrap prices are expected to maintain a steady downward trend this week.
Summary: The rapid fall in scrap steel prices has eased the serious loss of electric furnace companies. This week, the operating rate and capacity utilization rate of independent electric arc furnaces increased slightly. When they still remained at a low level of less than 50%, the overall use of scrap by short-process steel mills Demand remains subdued. From the perspective of long-process steel mills, the difference in screw waste and plate waste continues to shrink, indicating that the profits of long-process steel mills are still further compressed. From the perspective of supply, the market has a strong bearish atmosphere, and scrap bases are more motivated to lower their warehouses. The average daily arrival of scrap from 61 steel mills this week continued to increase by 8.21% compared with last week. Based on comprehensive judgment, the market’s scrap steel inventory has been rapidly transferred to steel mills, and the scrap steel demand of steel mills has further declined, which has caused the market to temporarily exceed supply. It is expected that the decline in scrap steel prices will gradually slow down next week and maintain a narrow range of fluctuations.
Post time: Jul-18-2022