China calls for lifting ban on imports of steel scrap

The China Scrap Association is lobbying to end the ban on imports of ferrous scrap to help cut domestic deficits and lower costs for steel mills.

China began to cut scrap imports in June 2017, intending to ban all scrap imports by 2020.

China also imposed a 25 percent import tariff on scrap metal from the United States, which was its main supplier of scrap steel.

But ferrous scrap is not waste, but an important iron-containing raw material that will help the green development of China's steel industry, Li Shubing, deputy director of the China Scrap Metal Recycling Association, said last year at the ICCSINO industry event in Chengdu.

Using scrap metal could save 0.35 tonnes of coal and reduce CO2 emissions per tonne of steel produced, compared to iron ore, he said. He is lobbying China's Ministry of Industry and Information Technology and the main government economic planning agency, NDRC, to remove scrap metal from the hazardous waste category so that it is not banned from import.

“It is unfair to ban scrap imports when most other steel-producing countries such as Turkey, India and Vietnam import a third of the world's scrap metal,” he said.

China leads the world in growth in scrap steel consumption, growing 15% to 101 million tonnes in the first half of 2019. But domestic growth and high prices are holding back this growth.

China began demanding import licenses for scrap metal on July 1. In September, he set a quota of 1,770 tons for imports of ferrous scrap for October-December.

China's ferrous scrap imports fell 83% from last year to 170,000 tons in January-August. China imported 1.34 million tons in 2018. Imports fell to near zero in August for the first time in 20 years, Li said.

The ban on imports of ferrous scrap has exacerbated the supply deficit in China. A plant official told Argus that about half of EAF's steel mills in southwest China have stopped production due to a lack of scrap.

According to Li, in 2009, China's ferrous scrap imports reached 13.69 million tons, accounting for 15.2% of total scrap consumption. China's ferrous scrap consumption is projected to reach 240 million tonnes in 2019, an increase of 20 million tonnes, and the scrap utilization rate in total steel production is projected to reach 30% by 2025.