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Winter storage is coming to an end, or there is still room for scrap steel prices to rise? Scrap Steel_Sina Finance_Sina.com

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Winter storage is coming to an end, or there is still room for scrap steel prices to rise? Scrap Steel_Sina Finance_Sina.com

Foreword: In December 2022, the scrap steel market as a whole showed a trend of rising first and then oscillating and adjusting. Stimulated by favorable macro policies, black futures rose in the first half of the month, driving the scrap steel market to strengthen, superimposing the demand for winter storage in steel mills, Steel mills raised scrap prices slightly to attract supply, and scrap prices rose slightly. As the Spring Festival approaches and the winter storage draws to a close, what will happen to the price of scrap steel? This article mainly analyzes the following aspects.

1. Scrap steel supply

As the weather is getting colder, the output of scrap steel in the upstream is gradually decreasing. In addition to the approaching spring break and the impact of the previous epidemic situation, some sites have a holiday in advance, and the scrap steel resources are in a state of tightness. It is understood that nearly half of the bases in the country have entered the vacation mode, and Most of the bases have not made winter storage this year, and their attitude towards the market outlook is more cautious. The supply of scrap steel may continue to tighten, which will have a certain support for the price of scrap steel.

2. Scrap demand

The number of steel mills overhauling and reducing production is gradually increasing, and the demand for scrap steel will also decrease accordingly. Judging from the shutdown situation of electric furnaces: currently 10 electric furnace companies in Anhui have shut down their furnaces, but they have received goods normally; 17 electric furnace factories in Guangdong have shut down their furnaces, and 2 electric furnace factories plan to shut down this week. The normal receipt of goods is still maintained; 6 of the 11 electric furnace factories surveyed in Sichuan have shut down, and 4 are planned to be shut down this week, all of which are receiving goods normally; from the perspective of blast furnace maintenance: 79 of the 201 production enterprises in the country have steel mills A total of 116 blast furnaces were shut down, of which 74 and 108 were under maintenance. In terms of volume, the blast furnace operating rate of major iron and steel enterprises decreased by 0.11% from last week. However, considering that the recent arrival of steel mills is not good, and during the Spring Festival, most of the remanufactured steel mills mainly consume inventory. At present, steel mills are still carrying out winter storage and replenishment operations. There is a certain demand for scrap steel, and the price of scrap steel is easy to rise. fall.

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3. Benefits of steel scrap

In December, the trend of pig iron raw materials was relatively strong, and the cost of pig iron remained high, although at the beginning of this monthCokeThe first round of raising and lowering 100-110 yuan has been implemented, and the cost of pig iron is still at a high level; in addition, the overall trend of imported ore in December is relatively strong. Although there was a slight drop at the beginning of this month, the overall price center of gravity has moved up. Although the raw material support for pig iron cost has weakened, However, the cost of molten iron is still significantly higher than that of scrap steel. Taking East China as an example, the cost of molten iron is about 90 yuan higher than that of scrap steel, and the overall economic benefits of scrap steel are better than that of molten iron.

Overall, scrap steel resources continue to be tight in the short term and it is difficult to change in the short term, and steel mills still have winter storage and replenishment needs for scrap steel. Superimposed scrap steel is more economical than molten iron, which has a certain support for scrap steel prices; however, considering that independent Electric furnace plants are gradually shutting down, and the number of blast furnace overhauls is gradually increasing. The price of scrap steel is limited. It is expected that the scrap steel market may still have room to rise in the later period, but the increase is limited.

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