China / Japan – China stopped ordering steel scrap from Japan and turned away existing shipments because of concern over radioactive fallout from the damaged Fukushima nuclear plant following the earthquake on March 11.
News agency Bloomberg, quoting Beijing-based analyst Umetal.com, reports that
China ‘stopped taking new orders shortly after the radiation problem was detected and almost all cargoes from Japan were prohibited unless provided with a third-party guarantee’. Umetal controls Singapore-based scrap metal trader H&C S Holdings.
A Tokyo-based analyst at Credit Suisse told the agency: ‘Unless the situation at the plant changes, Japan will face difficulty exporting scrap, further loosening the supply-demand balance. China is likely to shift purchases to the USA and Russia.’
Japan is the world’s second largest exporter of iron and steel scrap after the USA. It exported 6.47 million tonnes in 2010, according to the Japan Iron and Steel Recycling Institute, with China accounting for 42%.
The irony of the radiation leak is that Japan has large quantities of scrap steel available after the earthquake, including material from collapsed buildings and crushed cars. Prices have fallen sharply as a result. Tokyo Steel Manufacturing Co told Bloomberg it is paying 11% less for scrap than a month ago.