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China’s recycled steel raw materials, or ferrous scrap import volumes, in October 2021 fell for the third month in a row. The world’s top steel producer imported 9,152 metric tons of ferrous scrap in October compared to 20,519 metric tons in the previous month, down 55% month-on-month.

General weakness in demand from end users over the winter and a preference for domestic scrap collectively lowered import bookings.

Demand for steel scrap weakened after steel production cuts and energy disputes limited blast furnace operations and impacted the Chinese market. Scrap imports into China have declined due to a lack of buying interest.

China’s crude steel production fell for the fifth consecutive month in October 21. Steel production stood at 71.58 million tons, down 3% month-on-month and 23% year-on-year.

Chinese steel mills imported 3,930 tons of scrap from Japan in October 21, a sharp decline of 67% from 11,750 tons in the previous month, marking the lowest volume since February’s imports.

Chinese steel mills have held back from making deals for Japanese ferrous scrap due to supply-demand disparities and have instead been actively involved in trading cheap billets from Vietnam and Indonesia.

South Korean steel mills exported a total of 2,413 tons of ferrous scrap to China in October, a rebound of 11% from 2,170 tons in the previous month. It is followed by Hong-Kong, which supplied 464 tons to China in October. However, on a year-over-year basis, China saw strong growth of nearly 800% in scrap imports compared to 1,056 tons in October 2020.

For the remaining two months of 2021, market sources expect scrap trade activity in China to remain consistently subdued as steel mills continue to come under pressure amid production cuts, energy costs, and approaching winter. As a result, they are more likely to source scrap locally instead of importing it.