China’s Ministry of Industry and Information Technology (MIIT), the governing body overseeing the country’s industries, has tabled a draft list of steel scrap suppliers nationally it is considering for official authorization, subject to public feedback regarding their suitability, the ministry said in a statement issued on November 23.
The 113 steel scrap collecting and recycling enterprises MIIT has named represent the ninth batch of companies short-listed for official approval since MIIT began certifying collectors and processors in 2013.
The total number the ministry has approved to date stands at 478, as reported, However, MIIT said in its November 23 announcement that it had also disqualified seven steel scrap companies this time, so assuming that all 113 in this latest batch are authorized, the total would stand at 584. No explanation was given as to why the companies were disqualified but in the past, some firms have dropped from the list because they have been absorbed by other companies or have downsized or exited the scrap business completely.
Gaining MIIT certification can take months, from the time that interested scrap collectors and recyclers apply to the ministry for recognition, Mysteel Global notes. Also, the firms must ensure that their scrap processing capacity is above 150,000 tonnes/year and that factory areas are no smaller than 30,000 square meters.
Moreover, the applicants should host fully-sustainable resource processing facilities, such as scrap metal balers, shears and shredders boasting higher efficiency and lower energy consumption. Successful applicants can enjoy a number of preferential policy benefits, the most attractive of which is a substantial refund of up to 30% on their VAT payments Mysteel Global notes.
As of January 1, China had adopted new standards for the steel scrap industry, which saw most of the restrictions on scrap imports lifted and opened the import market that had been effectively blocked since 2018.
The introduction of the new standards had prompted a Shanghai-based market watcher to predict that more scrap suppliers may seek MIIT approval as more market participants will seek opportunities in the scrap business. The ministry’s announcement seems to validate this prediction as the 113 firms in this latest batch number 12 more than were approved in the eighth batch certified last year, Mysteel Global noted.
“Moreover, the standards change will help China build more large-sized steel scrap processing and delivering centers regionally, to meet the country’s increasing scrap demand in the coming years,” she added.
Written by Lindsey Liu, liulingxian@mysteel.com
This article has been published under exchange agreement between MySteel global and SteelMint.
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