Analysis: Scrap usage on the rise in China

摘要

Chinese mills have lifted their scrap usage this year to keep steel production high and to offset sintering restrictions and a shortage of iron ore. They have used an average of 17% of scrap in their basic oxygen furnaces (BOF) in the second half of this year, a higher rate than in the first half, according to analysis by S&P Global Platts. Market participants expect the ratio to rise in the fourth quarter as integrated mills need to consume more scrap in the steelmaking process when winter output cuts dent pig iron production at blast furnaces. One mill's ratio had reached 30% but this was an extreme case due to a lack of sintering capacity, so it was necessary to add more scrap to raise output. Other mills tailored their scrap ratio in part due to availability and accessibility. Much of the scrap comes from provinces in eastern China, such as Jiangsu Province, where a lot of scrap processing companies are located.