Scrap market price will stabilize

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Scrap market price will stabilize

Since October, the domestic scrap prices have risen first and then decreased, and fluctuated in a narrow range. In some regions, scrap prices have risen slightly or remained stable.

Since the middle and late October, the scrap market prices in East China and South China have declined first and then stabilized, while the scrap market in North China has shown a trend of first falling and then rising. Laiyue regeneration is expected to stabilize the price trend of scrap steel market in the later stage, and the demand of steel mills will not drop significantly, and the market has a strong wait-and-see attitude.

With the heating season approaching, winter production restriction measures began to be implemented, the demand will gradually weaken, the price is difficult to rise significantly. Although the supply side implements the policy of limiting production, there is no massive accumulation of resources in the market. The price of steel billet has been stable, thanks to its own billet resources is not high, as well as blast furnace maintenance, environmental protection and production restriction, enterprises have obvious willingness to stand up, the demand is not large, and the market mentality is still cautious.

With the gradual cooling of the weather, downstream construction projects will be reduced, and the demand side will be further weakened, which will continue to maintain a negative situation. As the demand for finished products continues to decline, the enthusiasm of steel mills to purchase scrap steel will be reduced accordingly.

At the same time, the growth rate of the real estate industry shows signs of weakening, and the steel market is intertwined with each other. On the whole, the operating rate of steel mills is high, the market supply pressure is large, and the enterprises are mainly based on the policy of making profit and shipping. Futures prices are weak shocks, short-term trend direction is unknown. Overall, the market price of Oncomelania in the short term may be stable.

In addition, since September, crude steel production has increased substantially, and the volume of iron ore transported to Hong Kong continues to increase, and the demand will continue to decline, but the price is still easy to rise but difficult to fall. In terms of coke, at present, coke enterprises are making good profits and operating rate is high, but the supply is still tight. Steel mills have low inventory, active purchasing, good market trading atmosphere and optimistic attitude of merchants. It is expected that the coke market will be stable and strong in the short term.

To sum up, we expect that scrap prices will not rise significantly in the short term. At present, the scrap market demand is still in the release period. In view of the limited acceptance of high price in the downstream, the scrap market will be in a narrow range of fluctuations, so it is suggested that iron and steel enterprises purchase on demand.