CONF: China steel mills exploring steel scrap imports

“China’s steel scrap imports were just around 10,000 tonnes over January-February, as Chinese buyers have just started examining this business after the door was reopened,” said Wang Yingsheng, deputy secretary general of China Iron and Steel Association. “But imports will surely increase significantly on year, as globally, over 100 million tonnes of steel scrap is traded annually,” he stated in his presentation. 

“We have been trying to import, even just one batch,” an official from a mill based in Northeast China remarked. “But it is very difficult and time-consuming, partly because the Customs checks are extremely strict,” he told Mysteel Global on the seminar sidelines. “You will be violating the law if your imports are found to be substandard and deemed to be ‘foreign waste’,” he stressed.

“It takes us over two months of organizing to get the consignment of 2,000 tonnes of scrap to our gate, and yet that tonnage is not even sufficient for us to meet our scrap needs for a single morning!” he lamented, pointing out that his mill’s daily consumption of scrap is 6,000-8,000 tonnes.

Statistics released by China’s General Administration of Customs show that the country’s steel scrap imports reached only 9,825 tonnes over January-February. 

The mill official said that nevertheless, the result was worth the effort, as “we did it in order to test the water and pave the way for possible moves in future.”

Another raw materials buyer for a steel mill shared the same view. “Over the past three months after China lifted the import restrictions, we have contacted a lot of overseas scrap exporters and placed inquiries, including in Japan, Singapore, and in Europe,” she remarked.

“However, we found that the final landed prices of the imported scrap proved more expensive than domestic prices. In addition, China’s current steel scrap standards are not in line with International benchmarks (so) there is a risk that the goods will be returned if they do not meet Chinese standards,” she said.

“After making a lot of comparisons, we finally quit importing steel scrap from overseas. It’s like a gamble, and we cannot afford (the risk) at this moment. But if you don’t participant and have a try, you will have no idea about the situation,” she observed.

As of March 25, China’s spot transaction price of the 6-8mm common-grade carbon steel scrap in Zhangjiagang was at Yuan 2,930/tonne ($447/t) excluding the 13% VAT, while recent bids from Chinese buyers for Japanese standard grade scrap were around $470/t CFR, Mysteel Global noted.

Written by Lindsey Liu, liulingxian@mysteel.com and Olivia Zhang, zhangwd@mysteel.com

Edited by Hongmei Li, li.hongmei@mysteel.com