China imports 553,000 mt recycled steel in 2021 after two-year gap

China imported 553,053 mt of recycled steel in 2021, after permitting inflows of the raw material following a two-year hiatus, latest customs figures showed.

Volumes originating from Japan contributed 70.4% of the imports at 389,276 mt, followed by South Korea at 95,915 mt.

The inflows surged the most during the second quarter of the year, as many buyers were unsure about new import regulations in the first quarter.

Volumes started tapering late-May, as the country sought to cool high steel prices, with recycled steel at multi-year highs in the overseas market.

The contrasting movement in the domestic and the overseas markets resulted in wide bids and offers with a $100-$110/mt spread in the third quarter.

Demand in the second half of the year was hurt by production cuts due to China's power consumption curbs and environment controls. Its recycled steel imports fell to an eight-month low of 11,878 mt in October.

Some buying interest returned late-fourth quarter, as Japanese recycled steel prices cooled, but trading was dull amid high uncertainty in the country's ailing property market.

China restricted foreign waste products from entering the country from January 2018 and broadened its policy to include ferrous scrap Dec. 31, 2018.

The ban led to diverging domestic and international supply prices, benefitting local suppliers who had no competition from overseas suppliers. Unprocessed ferrous waste was exported to China in huge volumes prior to the ban, as cheap labor made its processing cost effective.