Chinese Ferrous Scrap Usage Outpaced Steel Output Surge

SEATTLE (Scrap Monster): The Chinese ferrous scrap consumption outpaced the surge in crude steel production by the country during 2019, said latest statistics published by the Bureau of International Recycling (BIR).

The ferrous scrap consumption reported 15% surge to 215.93 million tonnes. Upon comparison, the consumption increased by 28.1 million tonnes. This outpaced the 8.3% jump in crude steel production over the previous year. The Chinese crude steel production totalled 996.3 million tonnes in 2019.

Meantime, the country’s ferrous scrap imports collapsed in 2019, falling from 1.34 million tonnes in 2018 to just over 184,000 tonnes. Year-on-year, the imports recorded 86.3% decline.

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The higher emission standards set by Chinese steel industry boosted scrap consumption by BOF mills. The EAF recorded huge drop in market share, when compared with BOF mills. The high scrap prices coupled with tight availability led to squeezed margins for EAF steelmakers. The decline in rebar prices accelerated the margin fall. The EAF utilization rates reported decline through the previous year.

The Chinese ferrous scrap consumption has increased by 159% since 2015. Over the same period, the crude steel production by the country has increased only by approximately 19.3%, BIR said.