The hottest scrap market may be down due to shock

The scrap market may fluctuate downward

recently, the scope of scrap price decline has the momentum of gradually expanding the heat shield that can be used as an aircraft. Shagang and Nippon Steel have declined in a narrow range. After measuring 3 (5) times, the instrument should be cooled in a natural state, and its scrap inventory has also reached a relatively high point

the market reserves of scrap steel are increasing year by year. In 2017, the production of scrap steel was about 175 million tons, and it is expected to increase to 190 million tons in 2018. However, due to the strengthening of environmental protection, the rectification of stockyards and processing enterprises in some areas has affected the circulation of resources to a certain extent, and the market supply has not reached the maximum. However, compared with the demand, the current scrap supply is still slightly sufficient

the market demand increment of scrap is significantly less than the production increment. The scrap consumption in 2017 was 140 million tons, and the estimated consumption in 2018 was about 150 million tons. In addition, in the northern market, due to the small increase in the operating rate of blast furnaces, the supply of molten iron is very sufficient and the price is excellent. It is obvious that it should meet the national standard gb228 "metal tensile test method". The demand for scrap steel has declined significantly, and scrap steel has turned into a minor supporting role again. In terms of electric arc furnace, although the current profit is OK, it is difficult for the operating rate to rise significantly at present due to factors such as policies and redundant equipment transformation

according to the current scrap demand of domestic steel enterprises, the service life of scrap inventory of most enterprises is concentrated in days. For example, a good way is to limit the use of plastic bags by raising prices. Some leading steel enterprises can reach 20 days to 1 month. Of course, there are still some enterprises whose scrap inventory is less than one week's consumption, but driven by the mainstream market situation, it is difficult to reverse the decline

in addition, the average daily output of crude steel in April was 2.5567 million tons, another record high. At present, the profit per ton of steel is considerable, and the steel enterprises have high enthusiasm for production. The pressure caused by output growth will gradually highlight in June with the plum rain season

therefore, the probability of shock decline of scrap in the later stage is relatively high. However, the rise and fall of scrap steel and thread spot are in the same rhythm, and there is some support in thread spot at present. Scrap steel will not fall much in the short term, mainly weak consolidation