China’s return as an importer of scrap will affect the entire global scrap and steel industry, and sources in the US are discussing the implications domestically.
China made its long-awaited return to the global scrap market in early 2021 with the reclassification of raw materials for imports and the first transaction in nearly 20 months to import scrap ferrous metals into China in the form of a nominal shipment from Japan.
The United States has not exported a significant amount of shredded scrap to China since April 2018, when 25,000 tons and 23,100 tons left the ports of Seattle and San Francisco, respectively.
In recent weeks, there have been reports of bulk purchases of shredded scrap, which were heading to China from the west coast of the United States. Although many have heard of the deal, market talk has remained unconfirmed. Nevertheless, domestic scrap buyers are wary of the new market entrant, although exporters who want to ship it to the country still have some reasons for concern.
It remains unclear when China’s impact on the global scrap market will be felt, but expectations have been heard ranging from just after the Chinese New Year celebrations later this month to the second half of 2021.
“There is a lot of serious discussion about purchasing in China right now. I think we will start to see deals agreed upon, and I think that American sellers are cautiously waiting for different scrap from different countries to see how they value it. ”
China can import more scrap than Turkey; in this case, there will be a significant (global) deficit. Until they go to the old “volume, volume, volume, volume” regime, which it doesn’t seem like they are doing, it is good for the industry, a trader said, referring to reports that there is the trend is towards higher quality steel and EAF production rather than historically large volumes of low quality finished products.