China urged to end steel scrap import ban

A Chinese scrap association is lobbying the government to end a ban on ferrous scrap imports to help relieve a domestic shortage and lower steel mills' costs.

China began to halt imports of scrap metal in June 2017, targeting a ban all scrap imports by 2020.

China also imposed a 25pc import tariff on scrap metal from the US, which had been its top supplier of steel scrap.

But ferrous scrap is not waste but a important Fe-content raw material that will help in the green development of China's steel industry, said the deputy director of the China association of metalscrap utilisation (Camu) Li Shubin at an ICCSINO industry event in Chengdu last week.

The use of scrap can save 0.35t of coal and reduce 1.6t of CO2 emissions for every tonne of steel produced compared with iron ore, he said. He is lobbying China's ministry of industry and information technology and the government's main economic planning agency the NDRC to remove scrap from the hazardous waste category so it will not be banned from imports.

"It is unfair to ban the import of scrap when most other steel-producing countries like Turkey, India and Vietnam are importing one-third of the world's scrap," he said.

China leads the world in steel scrap consumption growth with 15pc growth to 101mn t in the first half of 2019. But domestic shortages and high prices are hindering this growth.

China began requiring import licences for scrap from 1 July. In September it set a quota of only 1,770t ferrous scrap imports for October-December.

China's ferrous scrap import volume fell by 83pc from a year earlier to 170,000t during January-August. China imported 1.34mn t in 2018. Imports fell to nearly zero in August, the first time that has happened in 20 years, Li said.

The ban of ferrous scrap imports has intensified supply shortages in China. A mill official at the event told Argus that around half of EAF steel mills in southwest China have stopped production because of lack of scrap.

China's ferrous scrap imports peaked at 13.69mn t in 2009, accounting for 15.2pc of total scrap consumption, Li said. Camu forecasts that China's ferrous scrap consumption will reach 240mn t in 2019, up by 20mn t, and the ratio of scrap use in total crude steel production will reach 30pc by 2025.