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China: Ferrous scrap import from Japan remains slow despite relaxation in import norms

Despite the relaxation of many regulations that had limited Chinese imports of foreign scrap, it’s hard to see volumes from Asia’s largest scrap expor...

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1 Aug 2022, 10:39 IST
China: Ferrous scrap import from Japan remains slow despite relaxation in import norms

Despite the relaxation of many regulations that had limited Chinese imports of foreign scrap, it's hard to see volumes from Asia's largest scrap exporting country, Japan, improving significantly for the foreseeable future, according to Genkichi Ando, chairman of the Japan Iron & Steel Recycling Institute's International Network Committee.

Addressing delegates attending the China International Metal Recycling Conference 2022 in Kunming in Southwest China's Yunnan province on July 28, Ando noted that currently, China only permits high-grade steel scrap products such as 'HS grade scrap' and 'bushellings' to be imported.

"But the generation of such high-grade scrap is limited," he explained.

Moreover, "high-grade steel scrap is not only attractive to Chinese domestic buyers, but it is also welcome among Japanese steelmakers including both blast furnace (BF) and electric-arc-furnace (EAF) producers," Ando commented.

Another factor that might drag down Japan's steel scrap export volumes to China is the Tokyo government's commitment to achieving carbon neutrality, according to Ando.

In October 2020, former Japanese Prime Minister Yoshihide Suga had announced that Japan aims to achieve carbon neutrality by 2050 and that solar electricity and carbon recycling would be keys to help achieve this. Following his announcement, major Japanese steel mills and steel industry participants have formulated specific plans to achieve the target, Ando told delegates.

"For example, producing steel using the EAF route rather than by BF is now more focused and is expected to expand in the future as EAF technology emits less CO2," he illustrated.

"By doing this, Japan's domestic demand for steel scrap, especially high-grade scrap products, will definitely increase," he explained.

For now, over 60% of Japan's scrap exports are obsolete scrap such as H2 grade and shredded scrap. "Only if China can ease the strict importing standards currently applied, and the rigorous Customs checks, and start purchasing obsolete scrap, Japan's scrap exports to China may increase," Ando said.

During the first half of this year, China's total imports of ferrous scrap slumped by a huge 61% on-year to 127,795 tonnes, according to data from the country's General Administration of Customs. Among the total, shipments from Japan reached 92,455 tonnes, down 60% from January-June last year, the GACC statistics show.

Written by Lindsey Liu, liulingxian@mysteel.com
This article has been published in accordance with an article exchange agreement between Mysteel Global and SteelMint.

 

1 Aug 2022, 10:39 IST

 

 

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