China ferrous scrap usage surged in 2019
China's consumption of ferrous scrap grew by 15pc on the year in 2019 to 215.93mn t, according to statistics released today by the Bureau of International Recycling (BIR).
The 28.1mn t rise in Chinese ferrous scrap consumption outpaced an 8.3pc rise in the country's crude steel production to 996.3mn t.
The main driver for the increase was higher pollutant emission standards for the Chinese steel industry, which caused most of the country's basic oxygen furnace (BOF) mills to increase their scrap inputs, BIR said.
The current average steel scrap/crude steel ratio in Chinese BOF mills was estimated by BIR to be 20.2pc.
Higher BOF usage offset a slight fall in China's electric arc furnace (EAF) crude steel output in 2019. Chinese EAF production fell by 14.5pc to 103.2mn t after more than doubling from 54mn t to 120.7mn t between 2017 and 2019.
The EAF share of total Chinese crude steel production decreased to 10.4pc against 89.6pc for BOFs from 13pc against 87pc in 2018.
China's EAFs lost market share against BOF mills in 2019 as high scrap prices caused by tight availability meant EAF steelmakers' margins came under heavy pressure as domestic rebar prices weakened. This resulted in EAF utilisation rates falling throughout 2019.
The longer term rise in EAF production over the past five years, along with the increased scrap utilisation by BOF mills has driven Chinese ferrous scrap consumption up by 159pc, or 132.6mn t, since 2015. Chinese crude steel production only increased by 19.3pc over the same period.
China has become almost completely self-sufficient for sourcing ferrous scrap even as its demand has risen. Restrictions on imports of all scrap metal caused Chinese ferrous scrap imports to collapse in 2019, falling by 86.3pc to 184,000t from 1.34mn t in 2018.
The bulk of those imports were done in the first half of 2019, with even more stringent restrictions enforced from July causing monthly totals to drop below 5,000t throughout the second half.
China offsets fall in wider global scrap usage
The continuing surge in Chinese ferrous scrap demand offset reduced consumption by most major steelmaking regions, apart from the US.
US ferrous scrap rose by 1pc on the year to 60.7mn t in 2019, a slightly lower rate than its 1.5pc rise in crude steel production.
By contrast, ferrous scrap consumption in the EU-28 countries fell by 3.7pc to 87.5mn t against a crude steel production drop of 4.9pc. Japan's steel scrap usage decreased by 7.7pc to 33.7mn t against a 4.8pc crude steel production fall, while South Korean ferrous scrap consumption dropped by 4.7pc to 28.5mn t against a 1.4pc decline in steel output.
Turkish ferrous scrap consumption declined by 10.9pc to 27.9mn t while crude steel output fell by 9.6pc as the country continued to struggle with the impact of the 2018 lira crisis. Russian steel scrap consumption also fell, by 4.3pc to 30.4mn t, against a 0.8pc drop in crude steel output.
The proportion of ferrous scrap used in overall crude steel production declined across all markets where scrap consumption decreased.
Related news posts
Brazil unlocks relief spending to flooded state
Brazil unlocks relief spending to flooded state
Sao Paulo, 6 May (Argus) — Brazil's president Luiz Inacio Lula da Silva signed a decree to ease relief spending to Rio Grande do Sul state, which has been hit with historically heavy rainfall and floods. "We are going to do everything in our power to contribute to Rio Grande do Sul's recovery," he said today after signing the decree, adding that was only the first of "a large number of acts" for the state. The decree recognizes the state of emergency in Rio Grande do Sul and allows the federal government to grant funding and tax waivers to the state without having to comply with spending limits. In addition, it makes rules for public authorities to contract services and purchase products more flexible. The decree still needs both senate and congressional approval — which should be hasty, as both the senate and house leaders were present at the decree's signing. It is still not clear how much money it will take to rebuild the state, chief of staff Rui Costa and planning minister Simone Tebet said. But the minister of regional integration Waldez Goez estimated that it will take around R1bn ($200mn) to rebuild the state's highways. Rio Grande do Sul has been hit with heavy rainfall since 29 April. The highest volumes reached the central areas of Rio Grande do Sul, with cities receiving rainfall of 150-500mm (6-20 inches), regional rural agency Emater-RS data show. The monitoring station of Restinga Seca city, in the center of the state, recorded rainfall of about 540mm. Rainfall in Rio Grande do Sul overall surpassed 135mm in most of the state, according to the US National Oceanic and Atmospheric Administration (NOAA). State capital Porto Alegre is expected to receive more rain later this week, according to Rio Grande do Sul-based weather forecaster MetSul. MetSul warned that parts of the Porto Alegre metropolitan area could remain uninhabitable for weeks or months. The floods have left at least 83 dead and 111 missing, according to the state government. An additional 130,000 people have been displaced from their homes. By Lucas Parolin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Floods halt firms' operations in Brazil's south
Floods halt firms' operations in Brazil's south
Sao Paulo, 6 May (Argus) — Several Brazilian companies have suspended operations in the southern state of Rio Grande do Sul because of heavy rainfall that has caused severe floods and infrastructure damage. Flooding from the record rains has left at least 83 dead with 111 people missing, according to the state government. More than 23,000 people have been forced from of their homes amid widespread damage, including washed out bridges and roads across several cities. The dam of the 100MW 14 de Julho hydroelectric plant, on the Antas River, ruptured last week under the heavy rains . Power generation company Companhia Energetica Rio das Antas, which runs the plant, implemented an emergency evacuation plan on 1 May. Brazilian steelmaker Gerdau said on Monday that it suspended its operations in two mills at the state until it can ensure "people's protection and safety." The company did not disclose the produced volume of steel at those two mills. Logistics company Rumo partially interrupted operations and said that "damages to assets are still being properly measured". Petrochemical giant Braskem shut down its facilities at the Triunfo petrochemical complex as a preventive measure because of "extreme weather events" in the state, it said on 3 May. The company added there was no expected date to resume activities there. Braskem operates eight industrial units in Rio Grande do Sul that make 5mn metric tonnes/yr of basic petrochemicals, polyethylene and polypropylene, according to its website. By Carolina Pulice Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Panama's new president faces copper, canal issues
Panama's new president faces copper, canal issues
Kingston, 6 May (Argus) — Stand-in candidate Jose Raul Mulino will take office on 1 July as president of Panama with a challenge to decide on the future of one of the biggest copper mines in the Americas. The 64 year-old lawyer won yesterday's presidential election in the central American country, promising a "pro-investment and pro-business" policy. He won with 35pc of the vote and an about 10 percentage point lead over his next closest rival, Ricardo Lombana. But he has delivered no comment on the future on the shuttered Canadian-owned copper facility that is one pillar of the country's economy. His government will use public works projects and incentives for foreign investors to restore economic growth, Molino said, without giving details. Panama also faces a crippling drought that has lowered water levels and reduced transit through the economically important Panama Canal. First Quantum intends to meet the new government to discuss reopening the mine, the company's chairman Robert Harding said in March. "Whatever government is elected, we will work with it," Harding said. "We would like to see this mine reopen." Panama closed the $10bn Cobre Panama mine after a supreme court ruling in November that First Quantum's contract was unconstitutional. The mine accounted for 5pc of the country's economy and 1.5pc of global copper output, according to the government. The shutdown will limit the country's economic growth to 2.5pc this year against 7.5pc in 2023, the IMF has forecast. The supreme court's order to close the mine followed weeks of protests over the terms given to First Quantum in October. Protests wracked the country as opposition parties, trade unions, environmental lobbies and non-governmental organizations objected to the terms. "Although the mine's owners would be happy to negotiate a reopening with the new administration, this is a very hot and controversial matter for the new government," a senior official of the outgoing government of President Laurentino Cortizo told Argus today. "Any suggestion of negotiating a reopening would again bring people on the streets." Mulino ran with former president Ricardo Martinelli until the courts disqualified Martinelli because of a money laundering conviction. Martinelli had proposed that Panama renegotiate the contract with First Quantum to secure higher royalties and a stake. "Mulino is a mentee of Martinelli, but I doubt he would stoke public anger by seeking to reopen the mine," the official said. Cobre Panama produced 331,000 t in 2023, 5pc less than 2022 output, First Quantum said. By Canute James Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Brazil's Gerdau eyes special steel mill in Mexico
Brazil's Gerdau eyes special steel mill in Mexico
Sao Paulo, 3 May (Argus) — Brazilian steelmaker Gerdau is considering building another steel plant in Mexico as it seeks to expand its footprint in the country. The company started a feasibility study for the construction of a special steel unit that would have a production capacity of up to 600,000 metric tonnes (t)/yr, chief executive Gustavo Werneck said today. The move follows an optimistic outlook for the country's automotive industry and increased nearshoring — where companies move production closer to the US to tackle supply chain snarls seen during the pandemic. "Important players in the automotive industry, including current Gerdau customers, are expanding their operations to Mexico, which is becoming one of the most relevant countries in the production of automotive parts," Werneck said on a LinkedIn post. He did not give financial details. Gerdau's first quarter crude steel production in North America fell by 2.8pc , but it posted 3.3pc output growth in its special steel business — which includes operations in Brazil and US — mainly driven by automobile production in Brazil, it said. Mexico's auto sales to the US were 0.9pc higher year-on-year in March and first quarter auto exports rose by 1.9pc from the same period of 2023. Gerdau operates two mills in Mexico with a combined nameplate capacity of 1.5mn t/yr. By Carolina Pulice Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more