China’s scrap-steel imports ‘symbolic’ after two-year ban lifted, will not reduce need for iron ore
- China lifted scrap-steel ban for steel production at start of January after it had been blocked since 2018 to prevent global dumping of low-grade scrap ‘waste’
- Baowu Steel Group and Zhejiang Judong are reported to have agreed to deals last week to buy scrap steel from Japan, although at rates significantly above current market prices

China’s first deals to import scrap steel since lifting a two-year ban on it last week are “symbolic” and do not signal that the country is set to significantly reduce its demand for iron ore as the key steelmaking ingredient, according to analysts.
The ban on scrap steel for steel production was lifted from the start of January after China had prohibited its import to prevent the global dumping of low-grade scrap “waste” since late-2018.
But two deals by Baowu Steel Group and Zhejiang Judong struck just after January 1 appear to be part of an early trial and are not indicative of a surge in scrap imports, given the excessively high prices struck, analysts said.
“The market thinks these deals are mostly symbolic, as current economics don’t add up. Chinese domestic scrap prices are nearly US$60 a tonne cheaper than Japanese scrap prices after accounting for freight rates. So, we don’t think there will be any surge in imports in the short term,” said Keith Tan, S&P Global Platts’ senior steel and raw materials analyst.
Chinese mills can procure similar ferrous scrap grades locally today at much more competitive rates compared with the cargoes recently purchased from Japan
Navigate Commodities managing director Atilla Widnell added that the deals were more likely a publicity move.