In China, consumption of ferrous scrap outpaced growth in steel production

The higher emission standards set by the Chinese steel industry have increased the consumption of scrap metal at BOF plants.

China's consumption of ferrous scrap has outpaced the country's steel production growth during 2019, according to the latest statistics released by the Bureau of International Recycling (BIR).

The consumption of ferrous scrap increased by 15% to 215.93 million tons. For comparison, consumption increased by 28.1 million tons. This exceeded the 8.3% jump in steel production over the previous year. China's crude steel production in 2019 was 996.3 million tonnes.

Meanwhile, imports of scrap ferrous metals in the country fell in 2019, falling from 1.34 million tons in 2018 to just over 184,000 tons. Compared to the same period last year, imports decreased by 86.3%.

Higher emission standards set by the Chinese steel industry have increased scrap consumption at BOF mills. Production in EAF electric arc furnaces recorded a significant drop in market share compared to BOF plants. High scrap prices, coupled with limited availability, have resulted in lower margins for EAF steel producers. The decline in rebar prices accelerated the fall in margins. EAF use rates declined from the previous year.

Since 2015, the consumption of ferrous scrap in China has increased by 159%. During the same period, the country's steel production increased by only about 19.3%, according to BIR.