Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Steelmakers in China’s Tangshan are expected to import about 12,000mt of scrap in May, reported local media. The Chinese government had tweaked its standards for recycled steel raw materials and has allowed more imports into the country from Jan 1. Several steelmakers in Tangshan focusing on ultra-low emissions are planning to raise their scrap imports from South Korea and Japan.


In April, Shougang Jingtang, China Minmetals and other steelmakers imported around 11,000mt of scrap through Caofeidian Port. Delong, Jingye and China Shipbuilding Industry Corporation imported 12,000mt from Jingtang Port.


Replacing iron ore with recycled steel raw material helps reduce emissions and is also less energy-intensive. Since scrap is a recycled product, producing one metric ton of steel for scrap saves 1.3mt of iron ore, while reducing coal consumption by 350kg and cuts carbon dioxide emissions by 1.4mt.


In February, authorities directed steelmakers in Tangshan to cut production by 30-50pc and later in March the cuts were extended for the rest of the year. But the higher price of steel in the domestic market backed by robust demand encouraged mills to ramp production despite the production cut. With the uptrend in iron ore prices and the increased availability of imported scrap EAF-based steelmaker in China are expected to compete strongly for ferrous scrap imports, thereby lifting scrap offers to Asia.   

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