Induction furnace closures help trigger Chinese ferrous scrap exports

China: Despite its 40% export duty, China shipped abroad almost 100 000 tonnes of ferrous scrap in the first five months of this year, according to the latest ferrous metals Mirror from the BIR world recycling body.

This 'brief overhang' of scrap in China was caused, the Mirror suggests, by the Beijing government's programme to eliminate induction furnaces. At present, it also notes, basic oxygen furnace operators in China 'are increasing their steel scrap utilisation because of the significant cost and output advantages'. Stricter environmental regulations have also led to more scrap use and the government is now 'implementing new incentives for steel scrap consumption by promoting new processing facilities'.

Meanwhile, China's finished steel exports are more than 20% down on 2016 levels as a higher-priced market persists domestically; overseas shipments amounted to 6.81 million tonnes in June compared to 10.94 million tonnes in the same month last year. The drop in overseas shipments is also said to reflect the effectiveness of countervailing duties imposed on China by various countries.

According to the Mirror, the US scrap sector is enjoying a 'solid' year on the back of steady demand, good scrap flows, an improving export market and positive economic data from around the world. 'A strong sideways to up market' is forecast for the USA in August while experts in Europe are anticipating a continuation of 'relatively firm' scrap prices and 'bullish' sentiment.

Indian scrap importers have been 'hesitant' about purchasing large volumes of scrap because of the general business focus on achieving compliance with the newly-introduced Goods and Services Tax. However, both Pakistan and Bangladesh 'are continuing to ride the steel boom' in their countries and have imported a large number of bulk cargoes over recent months.

In his compilation of latest steel recycling figures, the BIR ferrous division's statistics advisor Rolf Willeke reports that Pakistan imported 4.039 million tonnes of steel scrap in 2016 for an increase of 24% over 2015. He also confirms that China shipped out 96 400 tonnes of steel scrap in the opening five months of this year, with the biggest buyers being Hong Kong on 27 523 tonnes, Indonesia on 21 110 tonnes and Taiwan on 20 133 tonnes.

Focusing on the first quarter of the year, Willeke notes that Turkey remained the world’s top steel scrap importer in lifting its purchases by 2.6% to 4.26 million tonnes while South Korea (+28.2% to 1.601 million tonnes) overtook India (-39.3% to 1.186 million tonnes) to claim the second rung on the scrap importer ladder. The EU-28 remained the world's leading steel scrap exporter following a year-on-year increase in its overseas shipments of 30.6% to 5.053 million tonnes in January-March 2017.

This article is based on the latest World Mirror on Ferrous Metals produced by the BIR world recycling organisation for the benefit of its members.



Sign up now for our free, weekly newsletter

advertisement