Steel Scrap Prices Rose Sharply in December

SHANGHAI, Jan 10 (SMM) - The average daily steel scrap arrivals across 110 steel mills surveyed by SMM rose 1.5% or 3,700 mt month on month to 236,600 mt in December. The in-plant steel scrap stocks at domestic leading steel mills stood at 3.19 million mt in December, up 2.8% MoM.

The steel scrap prices rose steeply in December, and the steel mills raised their purchasing prices continuously, hence the steel scrap suppliers heightened their operating rates, which is expected to ease the tight supply slightly. On the other hand, domestic EAF mills’ operating rates were low in December, while the production of BF mills was resumed, leading to higher demand for steel scrap.

Recently, the cost efficiency of pig iron has been higher than that of steel scrap for some time. On the other hand, the supply shortage of steel scrap still existed, resulting in limited increase in steel scrap arrivals. Looking forward, steel scrap suppliers will take holidays one after another, and EAF mills will also have holidays earlier than in previous years due to profit factors. It is expected that the steel scrap arrivals will drop significantly, while BF mills will actively build up their stocks at current stage out of their restocking demand.