MEE still scorns ‘waste’ imports, but market sees shift
At the MEE’s regular monthly press conference on June 30, ministry spokesman Liu Youbin was adamant that the central government’s determination to stop China being a dumping ground for “foreign garbage” remains.
“China will totally ban the importation of all solid waste including scrap metal by 2021 and will no longer accept and approve applications related to the import of solid waste,” he stressed. “We will work to ensure such shipments are basically reduced to zero by the end of 2020,”he told local media.
Since late 2016, China has been intensifying a campaign to restrict and, in some cases, ban the import of materials it regards as “foreign garbage”, as Mysteel Global has reported.
Caught up in the campaign has been ferrous and nonferrous scrap, with the MEE twelve months ago in July, 2019, beginning to restrict imports of eight types of scrap metal including high-grade copper and aluminium scrap, plus some grades of steel scrap, by moving these from an unrestricted import list of solid waste (deemed for use as raw materials) to a restricted import list. As a follow-up, from the end of last December China restricted a further 16 types of such waste, including stainless steel scrap, scrap tungsten, scrap magnesium and scrap titanium, as Mysteel Global reported.
As part of the campaign, Chinese scrap dealers have been required to apply
for import quotas from the newly established (and MEE-backed) conduit for
importing such materials, China Solid Waste and Chemicals Management, with the
result that the volumes of scrap arriving at Chinese ports have declined
massively. Last year, the global trading volume of steel scrap reached 103
million tonnes, while China only imported 184,000 tonnes in total, Mysteel
Global notes. This year’s first four months saw the the tonnage of imported steel
scrap decrease to only 5,379 tonnes.
Table: Imports of steel scrap from January to April 2020
Date |
Volume (tonne) |
Y-o-Y |
January |
258.5 |
-99% |
February |
258.5 |
-96.9% |
March |
2,849.4 |
-88.7% |
April |
2,012.6 |
-91.7% |
Total |
5,379 |
-93.7% |
(Source: China’s General Administration of Customs)
In response, Chinese steel market participants, together with the scrap industry grouping, the China Association of Metalscrap Utilization (CAMU), have been lobbying the central government to remove steel scrap from the category of ‘restriction’. The industry has been arguing that rather than waste, scrap must be viewed as a valuable raw material – and finally, it seems this argument might have won some quiet support in Beijing.
At a closed-door scrap industry event held in late June in Zhangjiagang, East China’s Jiangsu province, the CAMU’s secretary general, Sun Jiansheng, revealed that the MEE has agreed that in future, it will use the term ‘recycling steel materials’ in official documents, in place of ‘steel scrap’, Mysteel Global has learned. The change is to avoid the import of scrap materials that are unsorted and ungraded, Sun explained, implying that the door might soon open for the import of processed scrap materials, so long as these materials enter the country in accordance with directives set by MEE.
At the event, Sun also announced that new standards for scrap had been formally proposed to MEE and were now under consideration. In March this year, the China Metallurgical Information and Standardization Institute (CMISI) – a group affiliated with China’s powerful State-owned Assets Supervision and Administration Commission – joined with the CAMU to draft new standards for imported steel scrap in an effort to win government approval for recommencing steel scrap imports, as reported.
At last month’s event, Sun said that the new standards specified the terms and definitions of scrap, the technical requirements that various grades must meet, and inspection items and methods, and allowed for quality certificates to be applied to imported recycled steel materials. Sun told industry attendees at the event that the standards aimed to reposition imported steel scrap as ‘recycling steel materials’ and that he hoped the ministry would approve the proposed standards quickly, enabling scrap imports to resume within one year. In short, the curbs currently hindering ferrous and nonferrous scrap imports could be relaxed as early as 2021, Mysteel Global notes.
“We are looking forward to China returning to the scrap import business,” a steel scrap trader in Jiangsu commented. “Since China banned the import of scrap, domestic scrap prices have lost correlation with international prices. Once the controls are loosened, it will be helpful to leverage against the price hikes applied to domestically sourced scrap and to ease the supply tightness in the Chinese steel market,” he added.
Written by Lindsey Liu, liulingxian@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com
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