For now, market indications are not altogether
positive – at least, not in China. Mr Yan pointed to a
225.9% increase in the production of raw steel from
128 to 418 million tonnes over the last six years. In
the same period, consumption of scrap steel per
tonne of steel has declined 29.52% from 227 kg to
160 kg. Mr Yan pointed to a tendency ‘in resource
allocation to make up the shortage of scrap steel
resources with large consumption of pig iron’. He
concluded: ‘Such a development trend is very wor-
rying.’
Scrap steel’s on-going consolidation
Near the end of his speech Mr Yan turned his
attention once again to the ferrous scrap industry’s
supposed need for consolidation and batch purchas-
ing. ‘There are over 500 enterprises engaged in the
import of scrap steel in China with varied scales
and qualifications,’ he observed. ‘The disordered
competitions in foreign purchases are not propitious
for the healthy development of the import market of
scrap steel.’ Following up on his speech in Dalian in
March, Mr Yan noted that the Chinese government
is taking measures to consolidate the import mar-
ket, including a reduction in scrap steel importers
and ‘forming unions of purchasing’. This policy
change, as a matter of public record, has been circu-
lating for more than two years.
However, Mr Yan’s speech marked the first time
that actual statistics on the two regional scrap steel
batch processing pilot projects have been presented
publicly. According to Mr Yan, the ferrous scrap
purchasing base in Guangzhou imported 500 000
tonnes in 2006; the base in Jiangsu Province was
responsible for 1 million tonnes. As a percentage of
2006 exports, these batch purchases accounted for
more than 27% of all Chinese ferrous imports in
2006, and will grow in 2007. No analysis was given
as to how batch purchasing will affect the local and
international markets.
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Randy Goodman of US-based Carolinas
Recycling was one of the speakers in Tianjin.
The conference programme incorporated a
trip to the Soviet aircraft-carrying Kiev which,
in 1996, was sold to a Chinese company and
has been part of the military theme park in
Tianjin since May 2004.
RI_013 China CRRA:Opmaak 1 07-08-2007 13:31 Pagina 33