Scrap group calls for rebate on 17% tax on steel scrap sales

BEIJING (Scrap Monster): The China Association of Metal Scrap Utilization (CAMU) has urged the Chinese National Development and Reform Commission (NDRC) to lower the tax rate on steel scrap sales. Beijing had cancelled the 70% rebate on 17% VAT for steel scrap recyclers in 2011. The Association made this appeal during the 7^th China International Metal Recycling Conference held at Beijing during last weekend.

According to CAMU, the Association has been frequently communicating with Chinese authorities with regards to announcement of favorable policies that may benefit the steel scrap recycling sector.

Other industrial associations including China National Ship Recycling Association have been pressing for reinstatement of discount on higher tax.

CAMU urged the government to announce necessary policy measures to support the environment-friendly scrap industry, which in turn may help to invigorate the falling scrap consumption in the country.

As per rough estimates, every tonne of scrap used in steelmaking will reduce 1.6 mt of carbon dioxide emissions.

Most Chinese steel mills are seen reducing the scrap utilization owing to cost factors. The resumption of 50%-70% discount on tax will force many mills to reconsider their levels of scrap utilization. Incidentally, the Chinese steel scrap utilization fell nearly 6% from 117kg per mt in 2012 to 110 kg per mt in 2013. The country’s average steel scrap utilization rate by mills declined to 11% in 2013.