The Brussels-based Bureau of International Recycling (BIR) has reported its research into 2017’s 64.2 percent boost in the Chinese steel industry’s scrap consumption was “closely related to China’s closure of induction furnaces” in 2017.
In an April 6, 2018, press release, the BIR states the 147.9 million metric tons of ferrous scrap consumption reported by China in 2017 boosted that nation’s percentage of ferrous scrap used in the naton’s steel production to 17.8 percent.
During the preparation of the BIR’s ninth edition of its statistical analysis “World Steel Recycling in Figures 2013-2017,” an investigation into the statistical anomaly determined “that this growth in scrap usage was closely related to China’s closure of induction furnaces” in 2017, the BIR indicates.
Induction furnace production has been part of the steel industry in China for many years, but that sector’s production and steel scrap consumption were not included in figures gathered by China’s steelmaking associations or government ministries. Estimates indicate steel scrap consumption by the country’s induction furnaces was around 60 million metric tons in 2016, but that volume was not included in official statistics. “Hence, the steel scrap use figures BIR has received since 2010 from the China Association of Metalscrap Utilization (CAMU) do not incorporate this large quantity of steel scrap,” states the BIR.
Following the government-supervised closure of many induction furnaces in 2017, most of this 60 million metric tons of steel scrap was used in 2017 by China’s basic oxygen furnace (BOF) and electric arc furnace (EAF) steel producers. This, in turn, led to the statistical boost in 2017. The BIR also reports some 2.2 million metric tons of ferrous scrap was exported from China in 2017.
The increase in China’s steel scrap usage in 2017 “is in line with Chinese government plans for a general increase in steel scrap use in domestic steel production,” adds the BIR. The BIR’s research indicates BOF steelmakers are being asked by the government to increase their steel scrap use from its current 11 percent rate to at least 20 percent. Also, EAF production accounted for just 6.5 percent of China’s overall steel production in 2017, but that figure is expected to climb in the next several years.