Japan: Scrap industry rejects export curbs, calls for stronger domestic buying

• Japan scrap industry pushes back against export control proposals
• Industry voices urge stronger domestic buying instead of restrictions

Japan Metal Daily: Japan’s steel scrap industry has raised strong objections to growing calls for export restrictions, arguing that such measures misdiagnose the real cause of rising overseas shipments. Scrap processors and traders say the surge in exports reflects weak domestic buying by steelmakers, rather than any structural imbalance in scrap supply.

Industry participants stressed that Japan’s high scrap export volumes are largely driven by reduced procurement from domestic steel manufacturers. “If steelmakers increased purchases at reasonable prices, exports would naturally decline,” one scrap executive said, adding that policy proposals to curb exports fail to reflect on-the-ground realities.

The debate gained momentum following discussions at the government’s Expert Working Group (WG) for the Realization of GX on 5 February. The WG outlined two broad scrap-related initiatives: improving scrap quality systems and preventing overseas outflows. Proposals included designating scrap as an “important commodity” for economic security, abolishing export consumption tax rebates, and introducing export tariffs to restrict annual overseas shipments estimated at 7-8 million tonnes (mnt).

The document also cited examples of scrap export controls in other countries, warning that quality improvements alone could accelerate exports. It suggested implementing grade-based export restrictions depending on domestic supply-demand conditions.

However, scrap industry representatives pushed back, calling the proposals excessive and counterproductive. They warned that export controls could distort market mechanisms, hurt recyclers’ margins, and undermine Japan’s competitiveness in global scrap trade. Instead, they urged policymakers to focus on revitalising domestic demand by encouraging steelmakers to secure scrap through stable, market-linked purchasing.

Market participants cautioned that without stronger domestic offtake, restricting exports could lead to oversupply, lower prices, and financial stress across the recycling sector, ultimately weakening the broader circular economy Japan aims to support.

Note: This article has been written in accordance with a content exchange agreement between Japan Metal Daily and BigMint.