China mulling new steel scrap standards to reduce dependence on iron ore imports

China is likely to roll out national standard on "recyclable steel raw materials by this year-end, according to sources. An industry expert at the conference held on 13 Oct'20 in Shanghai said that the establishment of such standard will help coordinate the usage of recyclable steel raw materials both in and outside China and guarantee the promotion of a healthy development of Chinese steel industry.

The previously enacted group standard by CISA has been approved and will serve as a base guidance for the standard, marking a substantial progress in the promotion of recyclable steel raw material import and its technical standard.

High iron ore prices weighing on Chinese profit margins - With the quick recovery of domestic economy, the steel demand in China recorded increase and crude steel production has been at high positions. At the same time, the iron ore prices bumped up consistently weighing on the profit level amongst steel mills.

Mr. Li Shubin, the executive vice president of CAMU said that the heavy-reliance on imported iron ore is a grave threat to China's steel industry eating large amount of steel mills' profits. The expedited import and consumption of recyclable steel scraps will pave solid ground for the continuous healthy development of steel industry.

Other industry expert said that the recyclable steel scraps resources will help strengthen steel mills' foothold on strategical resources and market competitiveness as a powerful leverage and enhance the bargaining weight over iron ore prices.

Mr. Zhang Longqiang, the president and secretary of party committee of Metallurgical information and standardization institute said the formulation of standard is a move fully in response to the imperative demand of the industry and will categorize and define the high-quality steel scraps while limiting the import of inferior, hazardous, polluting scraps so that the import can meet the requirement of high-quality development in steel industry.

At present, the national standard " steel scrap" in use mainly focuses on the classification and requirement for domestic steel scraps, which is not pertinent as reference for quality imported steel scraps.

Advantages of using scrap over iron ore - Compared with using iron ore, the smelting process using steel scraps will save emitting 1.6 t of carbon dioxide and 3 t of solid waste for 1 t steel.

According to the persons working on the Standard, the definition of "recyclable steel raw material"are the products after the steel scrap being processed and one of the two main source for steel smelting. It is not only recyclable but also the sole substitutes for iron ore.

Wen Xuefeng, the director of solid waste dept under China's Ministry of Ecology and Environment said that it is beneficial for the promotion of energy saving, green development and heavy reliance on imported iron ore in the steel industry by fully taping the recyclable steel scraps both inside and outside China.