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Scrap >> China

China Country Market
Insights and Opportunities

Scrap Sector


Overview: Over the past few years, China has emerged as the world’s largest scrap importer and the United States as the largest scrap supplier to China. In 2006, the U.S. exported U.S$ 6.2 billion of ferrous, nonferrous, paper, rubber and plastic scrap to China, making scrap the 2nd largest U.S. export to China. . In 2007, U.S. scrap exports to China increased to $7 billion and in 2008, despite the economic downturn, increased 10.3% in the first 11 months of the year.

Opportunities: Market analysts see a rebound ahead, as volumes of scrap imports were picking up through 2009 as Chinese manufacturers begin to restock recycled inputs. 

Ferrous: The world financial crisis may actually help China’s imported scrap market to recover. Steel production cuts in Southeast Asia, Japan, South Korea and Taiwan could see an extra 6m t/y of Japanese scrap coming to China. Scrap imports from the U.S. and Europe are also likely to increase. The series of economic stimulus packages announced across commercial, residential and industrial construction projects may bring some relief for the battered base metal manufacturers in the second half of 2009. China announced spending to the tune of $586 billion in November, primarily aimed at infrastructure and redevelopment of earthquake-hit Sichuan province. Steel scrap demand in 2009 is expected to be around 74 mt. Chinese mills will generate some 27 million tons with 47 million tons coming from traders. Considering that some steel scrap will be sold for foundry and other uses, the shortage may reach about 10 million tons in 2009 and push up prices.

Non-Ferrous: China is currently the world’s biggest copper consumer and a shortage of supply exists in the market. The gap between copper demand and production has spurred an increase in imports of scrap copper. In late 2008, as the economic slump hit China’s manufacturing industries, China’s State Reserve Bureau announced that - in an effort to stimulate the flagging non-ferrous metals sector - it would fund the acquisition of a large non-ferrous metal stockpile. Some provincial governments also started to stockpile non-ferrous metals such as aluminum, zinc, lead and copper. If the demand increases and prices rise quickly the government stockpiles will be used to stabilize scrap prices.

Paper Scrap: Chinese companies rely heavily on imported waste paper to meet the market demand. Big players in the paper industry stand to benefit from China’s push to clean up the environment. Beijing has ordered the closure of hundreds of small paper producers, which will see some 6 million tons of capacity shut down in the next five years - about 20% of the industry total.

Scrap Plastics: The domestic output of plastics materials and resins can only satisfy 50% of market demand in China. As a result, China must import large quantities of plastics materials and recycled plastic scrap. However, regulations introduced on March 1, 2008, by China’s State Environmental Protection Administration (SEPA) added some categories of plastic waste to the list of goods which are banned for importation.
 




  2012 3rd International Conference on Environmental Science and Development (ICESD 2012)