China imported 38,602 t of ferrous scrap in Q1 CY’21 registering an exponential rise on y-o-y basis. In fact, the Q1’21 quantity is even higher than the total imports of CY’20 of ferrous scrap which was 27,133 t, as per the data maintained with SteelMint. Similarly, on monthly basis, import volume was recorded at 31,496 t in Mar’21, rising sharply m-o-m against 3,046 t in Feb’21.
Imports from Japan surge – The majority of the scrap imports in Q1 CY’21, was from Japan with a share of 62% of total imports. This was followed by South Korea with 23% and Hong Kong with 6% share. The remaining quantity was shared by Malaysia, Taiwan, Belgium etc.
On 31st Dec’20, the Ministry of Industry and Information Technology jointly issued a notice to confirm the duty-free import of recycled raw material for steelmaking with effect from 1st Jan’21. This measure has been taken to regulate the import management of recycled steel raw materials and promote the high-quality development of country’s steel industry.
China’s strict standards and inspection process is keeping volumes limited. Buyers are targeting premium quality scrap. The imports have been mainly for Japanese HS that falls in China’s new import grade category HRS101.
The new standard is likely to improve Chinese ferrous scrap import volumes. The recycling level of scrap both inside China and overseas may lower the country’s dependence on iron ore imports.
Chinese mills raised bids for Japanese scrap – Imported scrap for Japanese HRS 101-grade price to China have moved up in the recent trades. Few trades of around 2,500-3,000 t have been concluded at $497-501/t CFR basis. Japanese scrap offers continue to move upward before the Golden week holidays. A sharp hike in iron ore prices in China has also resulted in Chinese mills lifting bids for Japanese scrap.
Outlook- Chinese ferrous scrap imports are expected to rise further in the coming months with Japan being a key supplier.
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