China starts revising national standards for ferrous scrap

The China Iron & Steel Association (CISA) has announced that an inaugural meeting relating to the revision was held in Beijing on December 15 where representatives from Chinese government bodies including officials from China's Ministry of Industry and Information Technology and Ministry of Ecology and Environment, industry associations, and scrap recycling and processing companies discussed the new requirements for scrap qualification, according to CISA's press release on Wednesday.

Currently, ferrous scrap used in China – both domestically sourced and imported – must conform to quality requirements listed in the official document GB/T 39733-2020 which came into effect in 2021, as reported.

According to an 'instruction' on the standards' revision issued earlier this month by the National Public Service Platform for Standards Information (an organization under the State Council's State Administration for Market Regulation), the revision may include expanding the types of scrap deemed to qualify under the January 2021 directive, easing the restrictions on imported scrap types, broadening the impurity content regarded as acceptable, modifying the rules of scrap transport and acceptance, and relaxing the limitations on scrap sizes.

China's annual imports of ferrous scrap average 550,000 tonnes/year, which is far from meeting the country's expectations for the supply of high-quality scrap resources, according to the instruction. Therefore, it is necessary to revise the standards to allow more scrap resources to flow into the Chinese market, it proposed.

In mid-2019, China had begun imposing tough restrictions on steel scrap imports which caused the country's import volume of ferrous scrap to plunge – from 1.34 million tonnes in 2018 to just 27,133 tonnes in 2020, according to statistics from the country's General Administration of Customs (GACC).

On January 1, 2021, China reopened the door to foreign steel scrap, as long as the materials meet the "recycled iron/steel raw materials" standards adopted on the same day, as Mysteel Global reported. Since then, China's steel scrap imports have started to recover but at quite a slow pace, and annual imports have yet to return to the pre-2019 level.

The revision will be conducted by scrap-industry body China Association of Metal Scrap Utilization, the China Metallurgical Information and Standardization Institute, and leading companies in the industry such as China's largest electric furnace steel producer, Shagang Group. This team had also formulated the instruction announced earlier, Mysteel Global understands.

During January-November this year, China's imports of ferrous scrap totaled 497,448 tonnes, generally unchanged on year, according to the latest statistics from GACC.

To minimize the impact that the need to comply with national standards might be having on scrap import volumes, more flexible approaches could be considered regarding acceptable impurity levels in imported scrap materials, suggested CISA vice president Luo Tiejun at last Friday's meeting.

The revision work is scheduled to be completed by the end of next year, according to the instruction, paving the way for a fuller relaxation of restrictions on ferrous scrap imports, Mysteel Global notes.

However, the reaction of scrap market participants to CISA's announcement has so far been cool. "There is still a great deal of uncertainty, so no one knows how the situation will turn out eventually," explained a market watcher based in Shanghai.

Written by Anthea Shi, shihui@mysteel.com

Edited by Russ McCulloch, russ.mcculloch@mysteel.com