China to Need Ferrous Scrap Import for 10 Years, Industry Official

Secretary general of China Association of Metal Scrap Utilization Shu Bin Li said Chinese ferrous scrap demand will increase to 96 million tonnes for 2012 from 91 million tonnes in 2011, at presentation in international ferrous recycling forum held by Japan Iron and Steel Recycling Institute on Thursday. He said the demand increases when Chinese raw steel output could increase to 700 million tonnes for 2012 and 800 million tonnes for 2015. He said China will import scrap at least for 10 years to meet the growing demand.

Mr. Li said accumulated steel volume could reach 10 billion tonnes in China in 10-15 years. He said the scrap generation would reach annual 200 million tonnes based on the accumulated steel. He said Chinese steel industry could secure all of ferrous scrap requirement from domestic market at the time but the industry would keep importing scrap for another 10 years.

Chinese ferrous scrap consumption is 133 kilograms per 1 tonne of steel production while the consumption is increasing. Mr. Li said the ferrous scrap consumption is still small due to tight supply and higher cost for domestic scrap.

Mr. Li said China Association of Metal Scrap Utilization targets expansion of scrap consumption to 200 kg per 1 tonne of raw steel production. He said the association tries to establish better scrap supply system from collecting to processing for more supply and lower cost for domestic scrap.

Mr. Li said Chinese ferrous scrap industry should modernize the business through electronic trading and international trading. He said the industry should secure offshore supply source by merger and acquisition or purchasing share of offshore companies to expand international trading.