China is fighting to reduce the tax on the sale of steel scrap

The China Scrap Metal Recycling Association (CAMU) has called on the National Development and Reform Commission (NDRC) to reduce the tax rate on the sale of scrap metal. Beijing canceled 70 17 percent VAT rebate for scrap steel recyclers in 2011 The association launched a call at the 7th China International Metal Recycling Conference held in Beijing late last month.

The association has repeatedly communicated to the Chinese authorities to pursue more favorable policies that could promote the development of the scrap steel recycling sector. Other industry groups, including the China National Ship Recycling Association, have been able to achieve the restoration of the previous tax rebate.

CAMU called on the government to take the necessary policy measures to support the environmentally friendly scrap recycling industry, which in turn will help revive the country's falling scrap consumption. According to rough estimates, each ton of scrap used in steel production will reduce carbon dioxide emissions by 1.6 tons.

Most Chinese steel mills are cutting their scrap use due to price factors. The resumption of the 50 to 70 percent tax rebate will force many factories to rethink their scrap utilization levels. Chinese metallurgists have already reduced their use of scrap steel in 2013 by almost 6 percent compared to 2012. The average utilization rate of scrap steel at the country's mills fell to 11 percent in 2013.