Chinese Ferrous Scrap Exports Fall Sharply in Jan'18
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Increased domestic scrap consumption in China has resulted in second consecutive fall in its monthly ferrous scrap exports in Jan'18 while scrap imports fell by 57% in Jan'18.
China - world's largest steel producer has registered second consecutive fall in its ferrous scrap exports by 58% M-o-M in Jan'18. According to recently released customs data, the country exported 76,920 MT ferrous scrap in Jan'18 compared to 182,320 MT ferrous scrap exports in Dec'17.
Domestic scrap purchase prices in Jiangsu province increased sharply by upto RMB 550/MT to RMB 2680/MT in Dec'17 and fell down to RMB 2400/MT till mid of Jan'18. However, scrap prices remained high and unchanged in China compared to other major exporters like USA and Europe in Jan'18. On the other hand scrap exports from China remained very low to major importers like Indonesia, Malaysia and India.
The increased usage of ferrous scrap at integrated producers has filled the gap between crude steel and BF iron output, which had widened to as much as 121 million tonnes in 2017 from almost 89 million tonnes in 2016. This could have resulted in the sinking of scrap exports from China in December and January months. According to CAMU, China scrap consumption touched 140 MnT in 2017.
Vietnam remained largest importer of Chinese scrap in Jan'18 -
Vietnam stood as the largest destination for Chinese ferrous scrap in Jan'18. Vietnam imported 37,468 MT comprising 49% share in total Chinese ferrous scrap exports in Jan'18. Followed by other South-East Asian countries like Indonesia (16,601 MT, -82% M-o-M) and Malaysia (4,517 MT, -69% M-o-M) followed by other major importers like India (3,115 MT, -70% M-o-M) and Thailand (4,012 MT, -32% M-o-M). While Japan witnessed growth in scrap imports from China and imported 5,318 MT ferrous scrap in Jan'18.
During CY17, China's ferrous scrap exports summed up to 2.23 MnT which have skyrocketed compared with the negligible ferrous scrap exports during CY16. Over a concern of environmental issues, China had closed down obsolete induction furnaces resulting in increased scrap export volumes in 2017. Indonesia occupied highest 31% share of total scrap exports from China, followed by Thailand (14%) Vietnam (14%), Taiwan (12%), Malaysia (8%), India (7%), and South Korea respectively.
Country-wise China ferrous scrap exports -
| Country | 2017 | Jan'18 | Dec'17 | M-o-M % Change |
| Indonesia | 690,403 | 16,601 | 94,799 | -82.49% |
| Vietnam | 317,839 | 37,468 | 45,629 | -17.89% |
| Malaysia | 175,714 | 4,517 | 14,431 | -68.70% |
| India | 144,811 | 3,115 | 10,556 | -70.49% |
| Thailand | 318,105 | 4,012 | 5,899 | -31.99% |
| Others | 580,153 | 11,207 | 11,006 | +1.83% |
| Total | 2,227,025 | 76,920 | 182,320 | -57.81% |
Quantity in MT,
Source: SteelMint Stats & Customs Data
Chinese scrap imports fell 57% M-o-M in Jan'18 -
China imported 0.10 MnT ferrous scrap in Jan'18 which has tumbled by 57% M-o-M as against 0.23 MnT imports in Dec'17. Japan occupied nearly 90% share by supplying 0.09 MnT in Jan'18. Other major suppliers like United States, South Korea and Australia witnessed almost nil exports to China in Jan'18.
Thus, China's EAF steel production is expected to rise at faster pace in CY18 which presently contributes around 6.5% of total crude steel production in China.
