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

Imports of steel scrap into China is expected to reopen in 2021 to meet the growing demand for raw material. 


According to the China Association of Metal Scrap Utilization (CAMU), the industry standards for importing scrap have already been drawn up and national standards would be set next year if these are confirmed. 


Due to tight scrap supply in China, steel mills are facing high production costs, while international scrap prices were much lower than domestic ones, according  to media reports.


Import of steel scrap is currently banned. Reclassification of steel scrap from ‘waste’ to ‘raw material’ could pave the way for lifting of the ban. Therefore, Chinese steel mills hoped the government would allow scrap imports to reduce production costs and increase production efficiency. Officials from the Ministry of Industry and Information Technology (MIIT) and steel mills have also called for an accelerated reopening of scrap imports.


CAMU noted that if scrap’s share as a raw material for steel production increases to 30pc by 2025, it could replace 165mn mt of iron ore. Scrap currently accounts for 20.1pc of steelmaking raw materials in China.


According to CAMU’s secretary general, using ferrous scrap can reduce 1.6mt of carbon emissions for every mt of steel made, compared with traditional production by iron ore. 


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