China on track to revive ferrous scrap imports

China is on track to revive its ferrous scrap imports, which have fallen drastically since 2017, after exempting the recycled steel material from a ban on solid waste imports effective next year.

"China will ban the import of solid waste completely from 2021 and new applications for solid waste imports will not be accepted or approved from next year," said China's ministry of ecology and environment on 30 June.

Chinese scrap trading firms and consumers have shown interest in importing the steel-producing raw material because of rising domestic scrap prices amid firmer consumption and tighter supplies.

Jiangsu-based private-sector steel producer Shagang's scrap purchase price for No.3 heavy melt scrap with thickness at 6-10mm was 2,630 yuan/t ($372/t) this week compared with Yn2,530/t at the start of June and Yn2,700/t in early July 2019.

The current price listed by Shagang, which sets the benchmark for the domestic market, is around $100/t higher than HMS1/2 (80:20) cfr Turkey at $255.90/t yesterday, based on Argus' assessment.

China imported 5,379t of ferrous scrap during January-April, down by 93.7pc from the same period last year.

China began to halt imports of scrap metal in June 2017, announcing a restructuring of import permissions for scrap the same year.

Ferrous scrap was approved to be renamed as recycling steel material in March this year, with the China association of metal scrap utilisation (Camu) and the China metallurgical information and standardisation institute working on compiling a new standard for the commodity. The new standard will specify the definition, category, technology requirements, quality examination and transportation among other features.

"We are trying to complete the new standard and resume imports of ferrous scrap within one year," Camu secretary Sun Jiansheng said at an industry conference last month.