Scrap exports soared after the shutdown of the hot

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After the shutdown of medium frequency furnace: the export of scrap soared, and electric furnace steel enterprises ushered in a turnaround

"previously, the medium frequency furnace could remelt steel scrap and steel powder. Now these scrap steel enter the regular converter or electric furnace, because the density is low and the loss rate is very high." The head of a steel plant in Hebei recently told the 21st Century Business Herald that after cleaning up the medium frequency furnaces, some scrap steel lacks digestible furnaces

accompanied by this, despite the imposition of a 40% tariff, China's scrap exports, mainly of light and thin crushed materials, are hitting record highs. According to customs data, after the first "10000" in April this year, China's scrap exports surged again to 803450 tons in May, an increase of 954 times year-on-year and 4.3 times month on month

in the previous quarter, the overall export volume of scrap steel was less than 1000 tons. Earlier, the annual export volume of scrap steel in China was only about 1000 tons

China's steel industry is accelerating into a depreciation era: China's scrap resources reached 170 million tons in 2016. Compared with iron ore smelting, scrap melting and reuse is a more energy-saving and environmental friendly green resource. However, the current steel scrap ratio in China is only about 11%, far below the world average of 51.6%

the reason is the structural contradiction of China's steel process: as the main force of scrap digestion, the short process electric furnace accounts for only 7.3% of China's steel output, which is far lower than the world average level; The long process of blast furnace converter (from iron ore and coke to pig iron and then to steel) has been dominant for a long time. This structure makes China Import 65% of the world's iron ore, but underutilize a large amount of greener scrap steel

in a sense, the loss of scrap resources is in a race with the structural adjustment of domestic steel-making process. In this process, turning to electric furnace is the general direction of scrap smelting. In the context of capacity reduction, allowing electric furnace to replace converter capacity in equal quantities has become the common voice of the industry

domestic and foreign market prices are upside down

in the view of Gao Feng, a spokesman for the Ministry of Commerce, the recent surge in scrap exports in the short term is a result of the iron and steel industry resolving excess capacity

in response to a question from the 21st Century Business Herald, he said that scrap steel is the main raw material for the production of "ground bar steel". As of June 30 this year, China has banned the production of "ground bar steel", resulting in a sharp increase in domestic scrap inventory. In the short term, supply exceeds demand, resulting in an increase in export demand

according to the data of the Ministry of industry and information technology, in the first half of this year, China banned and shut down more than 600 "ground steel" production enterprises, involving a production capacity of 120 million tons. As ground steel was banned, more than 60 million tons of scrap resources were released

followed by an obvious oversupply of scrap steel for a period of time, in which the prices of domestic scrap steel, lightweight materials and other materials fell sharply

a recent survey by the all China Metallurgical chamber of Commerce showed that the scrap exported was mainly inferior light and thin crushed materials, accounting for 81000 tons of 96000 tons. The price of these scrap light and thin materials plummeted from 2400 yuan/ton in January 2013 to 500-600 yuan in May this year, a drop of up to 80%

Gaofeng said that the inversion of domestic and foreign market prices is an important reason for scrap going to sea. Due to market expectations, domestic scrap prices continue to fall, and domestic scrap with good quality has a price advantage

"take may as an example, on May 26, the price of scrap steel in East Asia market was 230 US dollars/ton, and that in India market was 267 US dollars/ton, both higher than the domestic price. In the same period, the representative price of scrap steel in Guangzhou was 1160 yuan/ton, equivalent to 171 US dollars/ton." He said

it is worth noting that the export of scrap steel has achieved rapid growth on the basis of heavy taxes. As a green and environmentally friendly high-quality resource, a large number of scrap exports is a scene that China does not want to see. In order to encourage recycling, China imposes a 40% tariff on scrap exports. However, this still fails to curb the recent upward trend in scrap exports

does this mean that high-quality scrap resources are flowing out of China? The metallurgical chamber of Commerce pointed out that the current export is less than 100000 tons, which is expected to be more than 200000 tons in the whole year. The absolute amount is relatively small, which will not have a big impact compared with the annual production of more than 100 million tons of scrap steel in China

Li Xiao, chief designer of the smelting raw materials department of the metallurgical industry planning and Research Institute, told the 21st Century Business Herald that although the recent growth rate of scrap exports was indeed very fast, the main reason was that the previous base was very low, and in terms of total volume, China was still a net importer of scrap. Qualified ingredients

"in terms of quantity, the monthly export volume now just exceeds 10000 tons, but China imports about 200000 tons of scrap every month. Last year, the annual import volume was 2.16 million tons. In the past decade, the annual import volume of scrap was as high as tens of millions of tons." She said

however, China's scrap imports have been declining in recent years. A material provided by Wang Fangjie, Deputy Secretary General of China scrap steel Application Association (hereinafter referred to as scrap steel association), to the 21st Century Business Herald shows that at present, scrap steel imports are subject to 17% value-added tax and exports are subject to 40% tariff, which leads to the domestic scrap steel price is much lower than the imported scrap steel price. Therefore, as the largest steel production country, China's annual scrap steel imports account for only 2% of the global trade volume, and most of them are indirect imports

China's scrap import volume of about 2million tons has been far lower than that of South Korea's 5.8 million tons and Taiwan, China's 3.2 million tons

the scrap association suggests that, at an appropriate time and under certain conditions, tariffs and value-added taxes on the import and export of scrap should be reduced step by step and in a planned way, so as to encourage domestic enterprises to integrate into the international market and ensure the resource supply of the domestic steel industry

accelerated depreciation of steel

the sharp fluctuations in the scrap market after the cancellation of the intermediate frequency furnace show that the current supply of scrap in China has far exceeded market expectations

the scrap Association said that since the crackdown on "ground bars", a large number of scrap steel resources have emerged, exceeding the expectations of most steel mills, scrap steel processing enterprises and industry insiders. Relevant enterprises and practitioners have not predicted the market enough, mishandled and suffered losses. This reflects that the channel and system of information statistics of scrap steel industry need to be improved, and the amount of scrap steel resources is still unclear

from the perspective of China's iron and steel reserves, China's waste iron and steel resources will continue to produce a large amount in the next five to ten years

Li Xinchuang, President of the metallurgical industry planning and Research Institute, pointed out that China's iron and steel reserves in 2017 were about 7.8 billion tons. It is expected that by 2020, China's iron and steel reserves will reach more than 10 billion tons, and the output of scrap resources can reach 200 million tons

due to different degrees of industrialization and infrastructure construction, unlike developed countries, a large amount of steel in China is used in infrastructure fields that produce less scrap. Li Xiao said that in this process, the proportion of scrap produced by social depreciation such as car dismantling in China's consumer field is very small. China's scrap comes from channels such as self-produced scrap (the part cut by the head and tail when steel enterprises play a role for a long time in the service life of plastics), processing Scrap (the leftover after the production of steel processing enterprises such as screws), imported scrap (its proportion has been less than 5%)

however, this process has entered the second half stage, and China's steel industry is accelerating into an era of depreciation

according to Weng Yuqing, President of the China Society of metals, depreciated scrap has the greatest impact on the total amount of scrap. China's scrap resources will increase rapidly during the year. At present, the proportion of depreciated scrap in the steel output of that year is only single digits, but it is expected to reach 40% by 2030

in the face of the upcoming huge scrap resources, China urgently needs to establish an efficient and sustainable digestion channel after removing the medium frequency furnace. At the same time, the upstream and downstream industries of scrap recycling are also facing changes

the light and thin materials, iron shavings and other material types in scrap were previously digested by medium frequency furnaces, but now after entering the normal channel, these material types cannot directly enter the converter or electric furnace, but need to be processed into broken materials and pressed cakes before being sold to steel mills. However, the domestic equipment capacity for these material types is insufficient, which has led to a sharp decline in the price of this kind of scrap

a person engaged in scrap recycling told the 21st Century Business Herald that because they could not sell at a high price, they had previously collected scrap in the community, preferring to waste newspapers rather than daily scrap. At the same time, a large number of grassroots acquisition sites have closed down due to losses, some have changed careers, and in some places, scrap steel with poor material type is piled up like a mountain

Li Xiao said that the volume of scrap such as light and thin materials is too large and the recovery rate is low. "Processing a ton of scrap consumes electricity, plus the labor cost of at least 20 yuan, but because the price is too low, the profit after processing is less than 20 yuan, so scrap processing enterprises have no enthusiasm."

she believes that there should be a price bottom line for scrap, otherwise it will cause a heavy blow to the scrap recycling and processing industry. "Although the scale is small, scrap steel is also an industry. If they cannot survive, no one will collect and process scrap steel, and no matter how large the amount of resources is, it is useless."

the utilization rate of scrap steel decreases year by year

in fact, the current scrap steel processing has high access barriers. Li Xiao said, "now scrap steel is cheap. Steel enterprises are very willing to process scrap steel by themselves because they want to use it for their own use, but they are facing industry barriers to scrap steel access."

in order to encourage the development of formal processing enterprises, as of the end of June this year, the Ministry of industry and information technology has published a list of five batches of enterprises that meet the "entry conditions for scrap steel processing industry". Scrap processing enterprises that enter the list can enjoy the preferential policy of 30% value-added tax rebate. This is a new tax preference measure restarted after the scrap preferential policy was stopped in 2011

previously, due to the excessive number of scrap recycling enterprises and the scattered market pattern, individual illegal traders took the opportunity to make false claims and evade taxes, while large formal recycling enterprises could not form a business scale, making a large number of scrap resources flow to "strip steel" enterprises that "do not need tickets for entry and exit". In this context, China completely abolished a number of preferential policies for scrap steel in 2011, and imposed a 17% value-added tax on scrap steel enterprises

this year is also an important node for the change of raw material structure in the iron and steel industry. Since 2011, the purchase of scrap has decreased significantly, the total consumption of scrap in the iron and steel industry has decreased, the import of iron ore has increased, and electric furnace enterprises have rebuilt blast furnaces to replace scrap with iron ore. The scrap ratio has set a new record since then. China's steel industry, with iron ore as the main raw material and high to long process as the main way, is gradually taking shape

in the view of Tang Yi, Secretary General of metallurgical technology and economy branch of China metal society, such raw material structure is unreasonable, he told 21st Century Business Herald, "We have transported ore from Brazil to China all the way, made steel with high emissions, and now export high-quality scrap abroad at such a low price, which is equivalent to leaving pollution in China, but sending out good resources. This is a very sad thing. China should significantly improve the utilization rate of scrap."

at present, the scrap steel-making ratio in China is only about 11%, while the world average is 51.6%. In some developed countries, such as the United States, the scrap steel-making ratio has reached about 70%

the other side of the underutilization of scrap steel is that China imports 65% of the world's iron ore: in 2016, China's iron ore imports reached a record of 1.024 billion tons. China's import dependence on iron ore has also increased year by year: from 14% in 1990, all the way

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