The decline in scrap steel inventories has expanded, consumption has fallen, and profits have shrunk

Last week, the national scrap steel market was relatively strong as a whole. Jiangsu Shagang’s scrap steel purchase price was raised twice in a week, accumulatively rising by 200 yuan/ton. Although the price after the increase was not higher than the local market, it was a lagging increase operation. There is still a big positive push. During the week, except for some areas where prices fluctuated due to the epidemic, they basically maintained a strong upward trend. With the strengthening of prices, the arrivals of steel mills have significantly decreased, the sentiment of suppliers’ shipments has weakened, and the decline in scrap steel inventories of steel mills has expanded. At the same time, the market reflects that the current volume of raw material purchases has decreased significantly compared with previous years, regardless of whether construction sites are scrapped or scrapped. Or industrial waste has declined to varying degrees, its own inventory is low, and the ability of market prices to withstand pressure has increased. At the same time, as the overall price of scrap steel increased more than the thread last week, the profits of electric furnace plants shrank again, which had a greater inhibitory effect on the market outlook. At present, neither long-term nor short-process steel mills have launched the winter reserve plan, and they have a bearish view on the market outlook.

Steel mills: The average operating rate of 85 independent electric arc furnace steel mills was 62.58%, down 0.30% week-on-week and up 9.86% month-on-month; capacity utilization was 54.44%, down 0.19% week-on-week, The month-on-month increase was 8.34%. The average cost of 40 independent electric arc furnace construction steel mills was 3,937 yuan/ton, an increase of 85 yuan/ton on a week-on-week basis. From the data point of view, due to the large increase in scrap steel prices last week, the profits of electric furnace plants have shrunk significantly, and Gudian still has a certain profit. The average profit has turned from positive to negative again, resulting in a decline in operating rate and capacity utilization.

Market: Due to the obvious reduction in the purchase of scrap raw materials, suppliers are facing difficulties in rushing goods, low profits, and low inventory, and the willingness to ship has dropped significantly. Most of them are based on fast in and fast out, and the supply of market resources is relatively limited, which forms a certain support for the price.