China: Scrap Consumption in Steelmaking on Upswing

China world's top steelmaker has been witnessing sharp increase in steel scrap ratio in this fiscal in its steel production. The increasing figures of scrap consumption is an indicator of Chinese steel industry has started stepping forward to greener steel making against environmental issues.

As per recently released statistics from CAMU (China Association of Metal Scrap Utilization), the scrap consumption in steelmaking in the country during first nine months of CY17 (Jan-Sept'17) has crossed 100 MnT level. The prime Chinese steel plants have consumed total 101 MnT steel scrap during Jan-Sept'17.

During Jan-Sept'16, Chinese scrap consumption was at 64.47 MnT which is lesser by 36.53 MnT, thus almost 57% Y-o-Y rise has been witnessed in Jan-Sept'17 against the scrap consumption during the same time frame in previous year. The country now aiming to boost its annual steel scrap usage to 150 MnT by 2020 and to achieve a 30% scrap ratio by 2025 as against just over 11% in 2016.

China was the world's biggest steel scrap user in the first half of CY17 as steel scrap consumption in China was at 62.2 MnT followed by EU-28 at 47.71 MnT, USA at 23.8 MnT, Japan at 17.85 MnT, Turkey at 14.58 MnT and Russia at 8.10 MnT respectively.

During Jan-Sept'17, China produced 639.09 MnT crude steel which is up by 5.7% Y-o-Y against 604.67 MnT crude steel produced during same time frame in CY16. As per crude steel production figures maintained with SteelMint, China produced 808.37 MnT crude steel in CY16.

In the same year steel scrap generation in China was around 160-170 MnT out of which 90.1 MnT scrap consumed in steel making in main mills, around 10 MnT scrap used in foundry plants and the rest 60-70 MnT scrap was used in induction furnace production.

Thus scrap usage ratios in China have increased during Jan-Sept'17 and expected to climb further in coming days.

CAMU also claims that the strong implementation of environmental protection laws and the establishment of nationwide carbon emission trade system has created favorable condition for the development of scrap industry in China and increasing domestic consumption of scrap supplement it further.

Quantity In MnT;
Source: CAMU & SteelMint Stats