Scrap deliveries in brief halt for China's CPC centenary

Restrictions on the use of trucks in some northern and eastern areas of China during celebrations to mark the centenary of the Communist Party of China on Thursday are disrupting deliveries of steel scrap to steelmakers and squeezing their stocks of available feeds, Mysteel Global has learned.

As of June 29, the daily consumption of scrap at the 15 blast furnace (BF) and electric-arc-furnace (EAF) steel mills across China under Mysteel’s regular survey decreased by 2.9% on day or 16% on week to average 5,393 tonnes/day.

“Insufficient stocks of steel scrap have forced some mills to reduce the ratio of scrap feeds in their furnaces and converters,” a Shanghai-based market watcher commented.

Steel mills in the North China provinces of Hebei, Shanxi and Tianjin, and in East China’s Shandong province, have notified their scrap traders to stop delivering scrap to their yards until after festivities to celebrate the CPC’s birthday wind up on July 2, according to local mill sources. The issue relates to truck exhausts and the need for clear skies for the celebrations, Mysteel Global notes.

“Over June 29-July 1, we are banning all scrap delivery vehicles whose emissions abatement technology falls below the new Stage VI standard from entering our plants,” an official from a steel mill in Tangshan in Hebei province said. Because of this, the works’ current steel scrap stocks at hand can only sustain their normal daily consumption for around eight days, he told Mysteel Global.

Another official with a Shandong-based steel mill confirmed that his plant has stopped receiving scrap since June 28 for the same reason. “We have not decided when to start accepting deliveries again, but maybe it will be after July 2,” she said.

In tandem, on June 29 steel scrap deliveries to the 15 mills Mysteel samples nationwide averaged just 5,007 tonnes, down by a huge 22% on day or by 24% on week, Mysteel’s survey showed.

On the other hand, scrap traders aren’t apparently fazed by the mills’ moratorium on accepting deliveries. “It’s not a big deal �" we can sell our scrap products to mills outside these regions,” a scrap trader in Shandong province said. “Scrap demand must increase once these mills resume receiving scrap (so) all I need to do now is just wait and focus on building up inventories for near-term selling,” he added.

Written by Lindsey Liu, liulingxian@mysteel.com

This article has been published under an article exchange agreement between Mysteel Global and SteelMint.