China’s Poised to Disrupt the Ferrous Scrap Market

China will control the global ferrous scrap market, it’s just a matter of time, says scrap expert John Harris of Aaristic Services, Inc.

China produces about half the world’s steel every year and has accumulated a scrap reservoir more than sufficient to meet its domestic steelmaking needs. There is little reason for China to import scrap, except in instances where it can supply mills near the coast with lower cost scrap purchases from ocean cargoes. Yet the Asian giant has recently upped its percentage of purchased scrap to around 9 percent from 3-5 percent in an attempt to influence the market price. “It’s not working,” said Harris. “We can definitely expect large increases in Chinese scrap exports in the near future as they perfect their logistics.”