"Even if there is policy support, scrap imports won't be too high as there is limited Asian scrap trade volumes," an east coast-based steelmaker said.
A Shanghai-based analyst thought China would struggle to import more than 1 million mt in 2021.
Based on privately-owned Chinese mill Jiangsu Shagang's latest bids for local heavy melting scrap, domestic prices would be around $439/mt on an import parity basis. Overseas offers for heavy scrap are currently above $500/mt CFR China, making imports unattractive to Chinese buyers.
Chinese steelmaker Baosteel purchased around 3,000 mt of heavy scrap from Japan in early January to kick start the import resumption.
While the volume of imported scrap seems unlikely to increase in the short term, growth for domestic scrap was also limited, market sources said.
China plans to increase domestic scrap supply to around 300 million mt/year by 2025, according to its 14th five-year plan for the iron and steel industry. Domestic scrap supply in 2019 was 240 million mt, according to the China Association of Metal Scrap Utilization.
This means the increase in scrap supply would only amount to about 10 million mt/year on average over the 14th five-year plan period of 2020-2025.
