Dry CargoGreater China

Cape concern over Beijing’s edict to use scrap steel as feedstock

Capesize owners will be concerned with the latest edict from Beijing regarding China’s huge steelmaking sector. China is looking to ramp up scrap steel as a feedstock, in place of iron ore.

“China is set to place electric arc furnace steelmaking at the centre of reorganization plans for its steel industry, in a move that could have significant implications for the seaborne iron ore market,” Alphabulk warned in its latest weekly report.

“As China’s steel scrap resources move to a phase of high recovery and the reform of electric power system continues to advance, developing electric furnace steelmaking will be an essential part of the restructuring of the steel industry,” said Wang Wei, director of the Ministry of Industry and Information Technology’s department of raw materials.

Using steel scrap instead of iron ore as feedstock would give the Chinese a second use for their increasing large stocks of scrap, less reliance on overseas ore, and a reduction in pollution.

“One ton of steel produced with steel scrap reduces carbon dioxide emissions by 1.6 tons. It also saves 1.6 tons of iron ore and 0.35 tons of coal, bringing long term implications for the seaborne iron ore market,” Alphabulk explained.

China is by far the world’s largest importer of iron ore, taking in over 1bn tonnes of the commodity every year, principally from Australia and Brazil.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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