According to market sources, local Chinese scrap traders and mills have begun intense lobbying with their government to reverse the policy of banning ferrous scrap imports by 2020 and remove the material from the list of hazardous material so that the ban will not come into effect. If traders are successful in getting the policy reversed, Chinese steel mills would surely enter the global scrap trade and this would further support the uptrend in international scrap offers.
In the January-August period of the current year, China’s import volumes of steel scrap amounted to 170,000 mt, down 83.1 percent year on year. In particular, in the months of August and September China did not import any scrap. Starting from July 1 this year, according to the Chinese new policy, all scrap metal importers in China need import licenses issued under approved quarterly quotas before they can import any material. In September, Chinese companies got a quota of less than 2,000 mt for the fourth quarter.
Limited import opportunities have led to higher local prices and even a steel production decline at some mills using EAFs, sources said.