The Chinese government will launch new standards for ferrous scrap imports shortly. After its decision to impose a complete ban on all kinds of solid waste imports by the end of 2020, there is a lot of global uncertainty about Chinese ferrous scrap imports.
China has put metal scrap under the solid waste category, resulting in a sharp decline of import volumes from around 2-2.5mn mt per year, two years ago.
In early 2020, the regulatory body indicated that they are allowing imports of nonferrous scrap via a quota system, like high-grade copper and aluminium scrap. However, the clarity on steel scrap imports is still awaited.
It is not clear if China would resume imports of ferrous scrap under quotas granted for next year. Removal of steel scrap from solid waste category is expected in the new regulations.
According to China Iron & Steel Association’s (CISA) representative Jiang Wei, the state administration would call for a meeting in early October regarding new standards for steel scrap and related-steel production.
Furthermore, the environment ministry has also urged for fixing the new standards at the earliest.
China has approved imports of 23,110mt of steel scrap this year. It is projected that Chinese scrap-intensive electric furnace production would soar from less 80mn mt in 2017 to 142.6mn mt by 2022.
Also, emerging markets for scrap are replacing traditional Chinese outlets slower than expected, partly because governments in South Asia and Southeast Asia are facing their own challenges in regulating the growing number of small scrap processing facilities locally.