China resumes imports of steel scrap under new standards
Posted on 05 January 2021
After over two years of steel scrap imports restrictions, the Chinese government, as widely expected, has reopened the door to overseas steel scrap starting January 1 together with the new adoption of the “recycled iron-steel raw materials” standards, according to an announcement from the country’s Ministry of Ecology and Environment (MEE) on the last working day of 2020.
“Earlier restriction was to be in line with the country’s overall curbing on the imports of foreign rubbish,” MEE explained in an explanatory note last Thursday.
“With the issuance of the new and detailed standards of the recycled iron-steel raw materials, the resumption of steel scrap imports so long as they meet China’s quality requirements listed in the documentation GB/T 39733-2020 will help the country utilize the global resources and to promote eco-friendly development in the domestic steel industry”, it added.
To avoid any misunderstanding and chaos in ferrous scrap imports, China has allocated new HS codes including 7204100010, 7201210010, 7204290010, and 7204490030 to the qualified scrap imports, according to MEE’s release.
An official from a steel mill in North China’s Hebei province, however, expressed surprise at the promptness of the resumption of steel scrap imports.
“I have not expected China to abolish the restriction on steel scrap imports so quickly, just on the same date of the new standards implementation, we had thought it would be lifted by mid-2021, as usually it comes a while after the new standards,” he said.
China’s reopening to imports of nonferrous scrap such as copper and aluminum, for example, took effect on November 1 2020 or quite some time after the adoption of the new quality standards in January 2020, he added.
A Shanghai-based market watcher believed that the soaring iron ore prices might have brought forward the resumption of steel scrap imports in China.
"China may hope to impose pressure on the high iron ore prices by freeing up steel scrap imports, enabling the domestic steel mills to have access to more steel scrap to substitute iron ore in steelmaking,” she added.
MEE indicated the same in the explanatory note on December 31.
"Steel industry is a fundamental sector in the national economy… the irrational surge in the iron ore prices this year has jeopardized the healthy and sustainable development of the steel industry, and the new policy will maximize the substitution of iron ore with the global steel scrap, providing a valid option for the Chinese steel mills,” it stated.
Besides, this “will help the Chinese steel industry to optimize the ratios of blast-furnace and electric-arc-furnace in the country’s steelmaking, enhancing the industry’s capability and reducing energy consumption and emission of waste including greenhouse gas”, it added.
As of December 31, Mysteel’s steel scrap price index hovered at Yuan 2,828.8/tonne ($433.7/t) on delivery, or up Yuan 105.6/t on month in the context of the overall surge in the global scrap prices, while on the same day, Mysteel’s PORTDEX 62% Fe Australian Fines, for example, rose more substantially by Yuan 197/wmt on month to Yuan 1,101/wmt FOT Qingdao, both including the 13% VAT.
Written by Lindsey Liu, email@example.com
Edited by Hongmei Li, firstname.lastname@example.orgSource : Mysteel Global