In the first half this year, ferrous scrap consumption in China went up by 15 percent or 13 million mt to 101.13 million mt, according to the information released by the China Association of Metal Scrap Utilization (CAMU) during its latest meeting held in Inner Mongolia at the end of July. Higher demand was covered by scrap output growth inside the country, while the scrap import volume showed a decline.
The Chinese government has been insisting on more green steel production so EAF-based producers increased their capacity utilization rates. The average operating rate of 53 independent EAF steel mills in China had increased by 14 percentage points year on year to 77.7 percent at the end of June, according to the deputy secretary general of the association. Moreover, more new producers are going to enter the market. This year about 21 million mt per year of new EAF capacities will be put into operation, of which 6.2 million mt per year has already been launched.
At the same time, in July the situation in the local steel market worsened as prices were continuously dropping and so EAF-based mills, facing a lack of margins, started to lower utilization rates and scrap purchases.