In line with SteelMint’s forecast, ferrous scrap exports from China have tumbled down by 42% M-o-M in Oct’17. Strong demand for steel scrap in China’s domestic market has resulted in reduced export volumes in Oct’17.
China – world’s largest scrap producer as well as consumer has registered a decline of 42% M-o-M in its ferrous scrap exports in October’17. According to recently released customs data, the country exported 294,990 MT ferrous scrap in Oct’17 compared to 506,879 MT ferrous scrap in Sept’17. After witnessing two consecutive rises in monthly scrap exports in Aug’17 and Sept’17 the country witnessed fall in Oct’17. Notably, this is the only significant fall in scrap exports so far in CY17 after a fall registered in Jul’17.
During the first ten months of CY17, China’s ferrous scrap exports summed up to 1.68 MnT which were skyrocketed by 177468% compared with the ferrous scrap exports during Jan-Oct’16.
SteelMint had earlier reported that Chinese Ferrous Scrap Exports Likely to fall in Oct’17, following the sudden rise in the domestic scrap purchase prices in October month by major scrap buyers like Shangang and Rizhao in China. Another major stimulus responsible for fall in exports was assessed as reduced minimum export price limits on scrap. Chinese local governments had declined the minimum price fixed for scrap exports in most of the provinces in Oct17. This minimum price is referred to calculate an export tax.
In Oct’17, Tianjin province in China had declined the minimum export prices for ferrous scrap from USD 180/MT to USD 120/MT in order to increase exports from the same province. Earlier to this, it was seen at the level of USD 210/MT. Notably, Chinese government already has 40% export tax intact on Chinese steel scrap exports.
Indonesia continues to remain the largest importer of Chinese scrap –
Indonesia remained the largest destination for Chinese ferrous scrap in October and imported 96,914 MT comprising 33% share in total Chinese ferrous scrap exports in Oct’17.
Followed by other South-East Asian countries like Vietnam (58,960 MT), South Korea (34,969 MT), Malaysia(32,224 MT), Thailand (18,785 MT), India (14,876 MT) and Taiwan (10,288 MT) occupying shares of 20%, 12%, 11%, 6%, 5% and 4% of total ferrous scrap exports respectively.
On the other hand, China imported 0.17 MnT ferrous scrap in Oct’17 which is up 13.33% M-o-M against 0.15 MnT ferrous scrap imports in Sept’17.During Jan-Oct’17, Chinese ferrous scrap imports increased by 14.37 % Y-o-Y to 1.91 MnT against 1.67 MnT same time frame of last year.
During Jan-Sep’17, the total consumption of steel scrap exceeded 101 MnT with an increase of 56.5% and Scrap ratio as feedstock reached 15.85% with an increase of 5% over the same period in China.
Thus, now fall in exports besides the strong growth in both its steel scrap usage and imports and the elimination of its induction furnaces causing environmental hazards is an indicator for China’s step towards rising greener steel production in near term.
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