January 2009 | Steel Raw Materials
Chinese supply tightens with approach of New Year: Asian Highlights
The Chinese scrap collection rate is even lower this month, not only because of the cold weather, but also because a few scrap merchants have halted operations.
The Chinese scrap collection rate is even lower this month, not only because of the cold weather, but also because a few scrap merchants have halted operations. More rebar and section mills have resumed output in China and are finding it difficult to secure sufficient amounts of scrap. Many merchants prefer to wait until after the Chinese New Year instead of selling available stock.
Some mills in eastern China are discussing prices with merchants order-by-order in January due to insufficient supply and rising prices. In the Shanghai and Nanjing markets of east China, prices for heavy melted scrap reached Rmb2,700-2,800/tonne ($394-409/tonne), an increase of Rmb300-400 ($44-58/tonne) on last months prices.
With prices nearing Rmb3,000/tonne($438/tonne), steel mills will be under more pressure from high cost and low profits soon, which indicates that little room remains for scrap prices to climb in east China until steel prices display further recovery.
In northern...
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