Ferrous scrap exports from China in the news highlights since past month. With Chinese government laying stricter regulations on electric arc furnace steelmakers, indicates the possibility of increase in scrap exports from China in the coming time. The Chinese government’s directive to eliminate scrap-fed induction melting furnaces in the country by June 30, led to a huge turnaround.
At the 7th International Iron recycling Forum held at Japan on 17th Jun’17, raised discussions on sustainability of Chinese ferrous scrap exports.
According to the data released by the China Waste Steel Application Association, 46,450 tons of scrap were collected last year, up by 13.6% compared to the previous year.
According to Mr. Hayashi, China launched a special tax policy to reduce and exempt 30% of the value added tax since July, 2015 in order to promote the use of scraps, predicting that the effect of the policy will become noticeable in the future.
“In the short term, surplus scraps due to abolishment of the local steel barrel will spread out of the country, surplus due to scrap of huge accumulation amount will occur in the long term after 2030”, he added.
As per them, China’s scrap exports will not last for a long time, because of the following reasons:
1. China continues to apply 40% of export tariffs on scrap exports
2. Chinese government recommends to raise scrap usage ratio in crude steel production from 7.2% in 2016 to 20% in future.
According to their reports, there is little possibility of sudden sharp increase in Chinese scrap exports as according to them surplus scrap accumulated in China will be marketed after 2030 following which scrap export volumes from China may witness sharp surge.
Japanese scrap suppliers eyeing South-East Asian markets – Mr. Hayashi also shared about rising demand and supply of scrap in South-East Asian countries. According to him, Japan scrap exports to Vietnam increased recently.
According to Japan customs data maintained with SteelMint, in CY16 Japan exported 8.55 MnT ferrous scrap up 12% Y-o-Y. Out of 8.55 MnT ferrous scrap exported from Japan in CY16, 1.98 MnT was exported to Vietnam.
~Inputs from IRU-MIRU
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