Singapore — China's state-owned trading company Zhejiang Metals and Materials Co. anticipates China's ferrous scrap imports will surge to 500,000-1 million mt in 2021 and 3 million-5 million mt in 2022 as the country's push for carbon-neutrality boosts demand for high quality materials, senior trader Lim Kok Jiak told S&P Global Platts in an interview March 10.
The country lifted its two-year ban on ferrous scrap imports on Jan. 1, enabling imports that comply with five categories of a new "recycled iron-steel materials" standard.
Lim said ZMMC, a front runner in the ferrous scrap market to China, has concluded 10 seaborne contracts since Jan. 1, with supply sourced from East Asia and the UK via both bulk and container options, and had around 20,000 mt due to arrive in northeastern China over March-early April.
"We have to be aggressive in trading to stay ahead of the pack," Lim said. "The potential is huge, and we want to grab market share. With China's greater environmental vision and its attempts to lower its heavy dependency on imported iron ore... support will eventually boom for this market."
Basing on ZMMC's estimate of a total 30,000-50,000 mt of ferrous scrap arriving in China in March, Lim projected that China would receive 500,000-1 million mt in 2021, with imports expected to ramp up in the second half of the year as officials become more familiar with new customs procedures and accelerate cargo clearances. Other grades such as shredded and busheling material, and supplies sourced from more origins might also be added eventually, as customs processes ramp up to facilitate the trade, he said.
"The customs procedures are really tedious now, requiring two rounds of full inspections. The first round is to clear the cargo for discharge from the vessel and the other round is done within the port's warehouse after it is fully discharged," Lim said, adding that tests for radioactivity, measurements for material size, visual inspections for explosive and impurities and chemical composition checks via laboratory testing were all being done.
"The longest wait is for the chemistry test, which can take a week or two. But I suppose down the road it would be easier as we get more familiar. It might also be because we're the first to import recycled steel to the port of Tangshan ... so many eyes are on it ... the port even had a small welcome ceremony during its discharge."
Source : https://www.spglobal.com/platts