BIR reveals reasons behind China’s surging steel scrap usage

Asia – Last year’€™s meteoric growth in China’€™s steel scrap usage resulted from a combination of the country’€™s closure of its induction furnaces and a ‘€˜statistical anomaly’€™, the BIR world recycling organisation has revealed.

Officially, the Chinese steel industry’s scrap use sky-rocketed more than 64% year on year to 147.9 million tonnes in 2017, prompting a dramatic increase in the proportion of steel scrap used in the country’s steel production to 17.8%. But according to BIR, it now emerges that the estimated 60 million tonnes of scrap used by China’s induction furnaces in 2016 was not included in official statistics.

‘Following the closure of the induction furnaces, most of this 60 million tonnes of steel scrap was used last year by China’s basic oxygen furnace (BOF) and electric furnace (EF) steel producers,’ BIR explains. ‘That was the reason behind China’s sharp increase in steel scrap usage in 2017.’

Given that the steel scrap consumed by the now-idled induction furnaces was not included in the figures for 2016 and for preceding years, ‘no direct comparisons can be made with the numbers for 2017’, it is added. The Chinese government is aiming for a general increase in scrap use in domestic steel production.

‘For example,’ says BIR, ‘it has been heard that the country’s BOF steelworks are being asked to increase their steel scrap use from 11% at present to at least 20%.’

This obligation could be increased to 30%, it has also been suggested. Furthermore, EF production accounted for 6.5% of China’s overall steel production in 2017 ‘but this figure is expected to climb over the coming years’, according to BIR.

As a result of these developments, further investments in steel scrap processing are planned in China, especially in shredder capacity.

According to Scott Newell, chairman of the BIR shredder committee, China’s current tally of approximately 100 shredders can be expected to increase to more than 200 within a few years.