The hottest steel scrap market may not be hot

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The scrap market of golden nine silver ten may be "tepid"

since the second half of 2016, cracking down on ground bars has become the hottest event in the whole scrap market. According to the survey, up to now, the medium frequency furnace of 98% steel strand for prestressed concrete gb/t 5224 (2) 003 has been banned. After a whole year, the pattern of scrap market has also undergone a new change, and the price difference between scrap types has expanded. After the medium frequency furnace was gradually banned, the price of some scrap steel materials fell precipitously, such as punching materials and iron shavings, which were once favored by merchants, became neglected, and high-quality materials such as steel plate materials and heavy wastes became the main targets of converter and electric arc furnace steel enterprises. In the first half of 2017, the overall price of scrap steel showed a trend of first falling and then rising. At present, the average price of heavy scrap steel in China is 1600 yuan/ton. Then the golden nine and silver ten will come soon. It is predicted that the scrap price will not change significantly in the short term, and will not rise or fall sharply during the golden nine and silver ten. It is more likely to fluctuate in a narrow range in the overall stability. The specific reasons are as follows:

first of all, at present, the cost of scrap steelmaking is lower than the cost of molten iron, and the proportion of scrap used in long process steel plants continues to increase. At present, the scrap ratio of converter is about 18% on average, which is 7% higher than that of cannon, which continuously listens to the requirements of users. In some large steel plants, the scrap ratio of converter is even as high as 25%-30%, and the scrap ratio of electric furnace is also increased to 80%, which truly reflects the crosslinking process and viscoelastic characteristics of rubber, The scrap consumption of long process steel enterprises continues to increase. In addition, in September and October, the electric arc furnaces put into production in the early stage of short process steel enterprises will enter the stage of centralized commissioning and resumption of production, and the scrap consumption will increase in the short term. Therefore, it is expected that the scrap price support will be strong during the golden nine silver ten year period. However, due to the national restrictions on new production capacity, the number of electric arc furnaces will not increase in a blowout manner for the time being, so the scrap increase is limited

secondly, from the perspective of policy, environmental protection activities are still in full swing, and the intensity of environmental protection renovation is not reduced. Most steel plants in Tangshan, Hebei Province have carried out the transformation of "coal to gas". In order to achieve the goal of steel production capacity withdrawal, some steel plants have fully started the shutdown plan. The one month environmental protection inspection conducted by the environmental protection supervision group in Shandong Province led some steel mills to start the maintenance program. Environmental protection inspection led to the shutdown and production restriction of some steel plants, which led to sufficient scrap inventory of steel enterprises, Limited procurement plans in September and October, and environmental protection inspection affected scrap processing enterprises, thus affecting scrap trading and curbing the sharp rise in scrap prices

finally, in 2016, the amount of waste steel resources in China was 1 700 million tons, 90.1 million tons consumed by mainstream steel enterprises, more than 10 million tons consumed by national foundry enterprises, and most of the remaining 10000 tons of scrap are consumed by medium frequency furnace steel enterprises. After the ban of medium frequency furnaces in 2017, there will be a short-term oversupply in the scrap market, which shows that the scrap price will not increase much in the short term

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to sum up, in the short term, both positive and negative factors exist in the scrap market, and the possibility of sharp price fluctuations is small. It is expected that the scrap price will fluctuate narrowly around the current price during the golden nine silver ten period

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