Singapore — Market reaction was mixed on the impact of China's slapping of a 25% tariff on imports of scrap of various types from the US, including ferrous scrap.
A US-based scrap association has said it has received feedback from Chinese buyers that they would be hurt by the move, part of the escalating trade war with China, while some Chinese market participants downplayed the impact, saying imports of US ferrous scrap had been declining anyway.
The Washington-based Institute of Scrap Recycling Industries said the Chinese commerce ministry's announcement has "caused consternation among Chinese consumers of US scrap commodities."
"Although these tariffs will not be levied on imports from other countries, it is our understanding that other regions may not be able to fulfill all of China's demand," ISRI said in a statement on its website. "This is in line with other reports that the trade war has had an impact on the Chinese economy across many sectors."
A Shanghai-based industry analyst said, however, that "the move would not have much of an impact as a whole as Chinese steelmakers haven't been buying a significant volume of US scrap for some time now due to its high price."
In the first half of 2018, China imported 860,000 mt of ferrous scrap, down 57% year on year, General Administration of Customs data showed. A breakdown by source country was not available as Chinese customs have stopped publishing the data since April.
The decline in imports was largely due to China's tightened restrictions on the import of foreign waste material for environmental reasons.
As the world's largest ferrous scrap consumer, China consumed 148 million mt of last year, 64.2% on the year, according to the China Association of Metal Scrap Utilization.
China's Ministry of Commerce said Wednesday its 25% tariff on US scrap would take effect from August 23, affecting various grades of iron and steel scrap under the tax codes 72041000, 72042100, 72042900, 72043000, 72044100, 72044900 and 72045000.
According to US International Trade Commission data, China ranked 12th among US scrap export destinations in June, with the traded volume of 12,431 mt, the lowest since March 1998.
In the first half of 2018, China was the sixth largest buyer of US scrap, having bought 460,395 mt, or 5% of the 8.6 million mt it exported.
--Samuel Chin, email@example.com
--Clement Choo, firstname.lastname@example.org
--Analysis by Lucy Tang, email@example.com
--Edited by Jonathan Dart, firstname.lastname@example.org