Posted on 23 Apr 2021
The global scrap industry and steel suppliers in some countries are going to benefit from China’s steel export reduction, Shanghai Metals Market (SMM) chief executive Ian Roper said at the Kallanish Asia Steel Markets 2021 conference on Thursday. This is because demand for scrap will rise significantly, but for iron ore it will subside, lowering BOF-based steelmakers’ costs.
The China Metallurgical Planning & Research Institute (MPI) also noted at the event that China is facing up to a medium- and long-term decline in steel demand.
“The number one beneficiary over the next ten years is going to be the scrap industry and especially with everybody moving forward to more and more recycled steel,” Roper said. “This will happen after we get carbon taxes, like expected, in the amount of 30% for the emissions of blast furnaces.”
The main scrap exporters like the US, Japan and South Korea will also be big winners, he added.
“Japan will benefit the most from the reduced China steel exports, because the Japanese steel mills have been suffering from higher iron ore prices,” Roper observed.
Another trend in the Asian market is that “cheap” Chinese steel of poor quality will slowly go away, said NU Steel senior vice president Harold Quek.
“This will probably happen in the next 2-3 years due to the efforts of the Chinese government to put a lot of pressure on mills for less carbon emissions,” he added. “All the plants that are producing poor quality steel products now will eventually find out that they are unable to compete. We also believe that there will be a significant change in the regional supply chain.”
Source:Kallanish
