A total of 148 steel scrap collecting and recycling enterprises across China have passed qualification reviews undertaken by China’s Ministry of Industry and Information Technology (MIIT), the country’s governing body for industrial sectors, according to a MIIT statement released on January 3.
Since 2013, China has released six lists of qualified steel scrap suppliers, totaling 252 in number and hosting over 70 million tonnes/year in processing capacity, as reported. The newly added 148 firms represent the seventh batch and like those similarly recognized by MIIT previously, they can enjoy some preferential policy benefits such as substantial refunds of as much as 30% on their VAT payments, Mysteel Global notes.
According to MIIT’s January 3 announcement, the ministry has also disqualified 21 steel scrap companies this time, leaving 231 still qualified (prior to the addition of the 148). The ministry removed these 21 suppliers from its list of qualified producers, as their facilities had been dismantled (because the firms are leaving the industry), or the firms have already been liquidated after having filed for bankruptcy or after had been bought by other qualified steel producers, the notice showed.
“With more qualified steel scrap collecting and recycling companies entering the market, China’s steel scrap sector will become more stable, rational and larger, which will better satisfy China’s steel industry in coming decades,” a Jiangsu-based scrap market watcher remarked.
China’s steel scrap supply and consumption have seen sustainable growth since mid-2017. Feng Helin, vice secretary-general of China’s Association of Metalscrap Utilization told delegates at a conference in December that China’s steel scrap consumption is estimated to rise to 240 million tonnes in 2019, up 9% on year.
On the assumption that the country produced 990 million tonnes of crude steel in 2019, scrap consumed in total steel production, thus, is expected to rise to 21.5% for 2019 from 20.2% for 2018, while crude steel output via electric-arc-furnaces (EAFs) may remain largely steady at about 9.9% of the country’s total steel output, against the 9.8% proportion for 2018. This is mainly because EAF mills lack competitiveness against blast furnace makers, Feng added.
Currently, China’s steel scrap industry still struggles with high costs, great variations of scrap quality and high industrial power chargers, Mysteel Global noted. As a result, domestic steel scrap prices remain at a relatively high level, with Mysteel’s steel scrap price index assessed at Yuan 2,582.3/tonne ($369/t) as of January 3, or Yuan 94.5/t higher on year, according to Mysteel’s database.
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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