Entering the traditional consumption season in September, the prices of rebar, billet, plate and other steel products have risen.Scrap steel prices also appeared a larger increase, compared with the same period last year up by 10%;And this year’s rebar prices and scrap prices run in the opposite direction, down 17.2 percent from the same period last year.
according to monitoring data on September 3, 2019, the domestic top ten key cities tertiary rebar (Φ 25 mm) the average price is 3726 yuan/ton, than the same period last year dropped by 774 yuan/ton, or 17.2%.As of September 3, 2019, the price of tangshan scrap steel was 2,630 yuan per ton, up 240 yuan per ton or 10% over the same period last year.
With the spot price of rebar lower than the same period last year, why are the prices of scrap steel, the raw material for steelmaking, higher?
The price of iron ore, also used in steelmaking, has been rising since the beginning of this year as expected supply of the metal has been reduced by the ongoing dam failure of Brazil’s vale.Since may this year, iron ore prices have continued to climb, hitting new highs for the year, topping 900 yuan at one point.Under the iron ore price soaring, causes the molten iron cost to rise unceasingly, causes the steel mill cost to increase greatly.Therefore, many steel mills are more willing to choose short process, more environmentally friendly scrap steel as raw material, thus forming a positive indirect demand for scrap steel.
From the perspective of national policies, the state has always emphasized the continuous promotion of pollution prevention and control, the reform and improvement of relevant systems, and the coordinated promotion of high-quality development and ecological environmental protection.We will transform the steel industry into one with ultra-low emissions, and upgrade heavily polluting industries to meet emissions standards.Therefore, as a renewable material that can be used indefinitely, scrap steel has a very high development and utilization value in terms of energy conservation, environmental protection, reducing the exploitation of primary resources and maintaining ecological balance.
Therefore, in recent years, the state strongly advocated the use of scrap steel for short – process electric steelmaking.In addition, with the deepening of supply-side structural reform, the implementation of the new national environmental protection law and the strengthening of environmental protection supervision, as well as the establishment of carbon emission trading system across the country, has created a good condition for the development of scrap steel market.As a result, some steel mills increase the purchase of scrap steel, plus scrap steel resources tight, scrap steel supply tight situation is difficult to change.
In addition, since 2018, the government’s control over the scrap steel industry has become more and more strict, whether the certificates are complete, whether the environmental protection equipment is in place and so on have become the basic threshold.Therefore, also leads to the scrap supply reduction, aggravates the supply and demand tension situation, therefore scrap price has also appeared the unceasing rise.
So, scrap prices will not rise?
From the present point of view, because the steel price compared with the same period of last year decreased a lot, steel mill profit greatly reduced, therefore weakened the production enthusiasm of the electric arc furnace enterprise, some steel mills appeared spontaneous production suspension.At the same time, some converter enterprises because of the use of scrap steel and lead to high costs, some enterprises have losses, thus reducing the consumption of scrap steel.In addition, “the 70th anniversary” is approaching, a number of regions issued a policy to limit production, some steel mills have started to stop production, which will greatly reduce the demand for scrap steel.Scrap supply of tension will be eased, therefore, the late period does not have the conditions for a significant rise.