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Scrap steel inventory hits record low, consumption goes into critical period

The national scrap market sentiment is still empty this week, and the market prices in different places have also been lowered by different degrees. Among them, the major scrap markets have not yet been opened, but due to the macro effect, the rework rate has increased. Scrap processing and distribution companies have started construction. Most workers have not yet returned to work. In addition to traffic control, enterprises are basically on the sidelines, and some have received goods at reduced prices, but the transactions have been relatively small. In terms of steel mills, scrap prices of most steel mills in North and East China continued to fall, and steel mills in other regions also successively lowered their prices. Scrap from steel mills is scarce, and blast furnace mills have begun to reduce scrap. For electric arc furnace steel mills, the resumption time is postponed, scrap demand is restrained, the output of finished products is reduced, and sentiment in the finished products market has rebounded, but the spot prices of finished products are still weak, and the futures market is affected by this. Black futures have a strong rebound, of which The weekly rebound of iron ore futures hit a new high in recent years, while the length of electric arc furnaces with large scrap demand has continued to be in a non-production state. In addition, the scrap price gap of snails has narrowed, and the profits of electric furnace plants have been insufficient. Therefore, the scrap market is mainly waiting. On the whole, the current supply and demand of scrap steel is weak. Recovery takes some time. Under the influence of finished products, the sentiment of the scrap steel market is empty.

As of February 13, the total scrap inventory of 61 steel mills in China's iron and steel industry was 1,987,300 tons, a decrease of 149,400 tons or 17.3% from the previous week; the turnover days were 12.7 days, a decrease of 1.5 days. The average daily arrival of scrap from 61 steel mills of my steel this week was 356.67 tons, an increase of 32.57% from last week; the average daily consumption was 1828.83 tons, a decrease of 16.6% from last week. Looking at the operating rate and capacity utilization rate: As of February 13, Mysteel surveyed 53 independent electric arc furnace steel plants across the country. The average operating rate was 5.88%, which was the same as last week; the capacity utilization rate was 4.09%, which was lower than last week. 0.08%. It can be seen from the data that both the inventory and the average daily consumption have decreased month-on-month, and due to the impact of the state's promotion of starting, the average daily arrival of scrap steel has improved compared to last week. Although the daily average arrival has improved, it is still at a low level, and the supply of scrap steel is not up. Therefore, some long-process enterprises have also started to adjust the iron-steel ratio. Therefore, the recovery of the demand and consumption of scrap steel should also continue to pay attention to public health events.

Although the recent scrap market demand has fallen to freezing point, the current rebound in the financial and futures markets shows that the country is determined to step up to maintain market balance. Therefore, the scrap market does not need to be overly pessimistic. Gradually increasing, the scrap output of various companies will gradually be restored, and the scrap market will follow the market's fundamentals. It is understood that, due to the tight resources of the scrap market and the poor transportation conditions, some bases are also receiving goods continuously to prepare for the later stage. On the whole, when the direction of the scrap market is unclear in the near future, the bases of enterprises that have resumed construction should be in a safe production environment, and they should also appropriately avoid risks. 

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