China's scrap industry meets the opportunity and its consumption is expected to keep increasing in the future

It is reported that the national standard of "recycled iron and steel raw materials" was released on December 14 and will be officially implemented on January 1, 2021. The standard will maximize the exploitation of international and domestic renewable iron and steel raw material resources, improve the recycling rate of iron resources, increase the effective options of iron and steel enterprises, restrain the use of iron ore and the rise of price to a certain extent, and also drive the utilization of scrap steel into a period of rapid development during the "fourteenth five year plan".

Scrap iron and steel is a kind of renewable resources and an important raw material for the green development of iron and steel industry. Under the background of vigorously developing circular economy and low-carbon economy in China, the scrap industry has a broad market and bright development prospect. Scrap industry, including scrap recovery, processing, production, trade and application, constitutes a complete industrial chain.

At present,   steel scrap in the market mainly comes from scrap of automobiles, machinery, building materials, etc., among which machinery is the largest source of steel scrap in China, accounting for more than 50% in processing and 40% in depreciation.

According to the statistical data, China's scrap consumption will rise to 216 million tons in 2019, with a year-on-year growth of 15.1%, mainly due to the improvement of pollutant emission standards of China's iron and steel industry. In addition, there is still room for China to improve its scrap utilization level by 21.7% in 2019, which is much lower than that of China. By the end of January to October 2020, the total consumption of steel scrap in China has reached 176.83 million tons, with a year-on-year increase of 0.6%, and the ratio of steel scrap is 20.23%.

At present, raw materials are heavily dependent on imports. The implementation of the new national standard can improve the guarantee ability of renewable iron and steel raw materials resources, and is expected to replace iron ore, provide the proportion of scrap utilization, and promote the high-quality development of scrap processing industry, which is also of great significance to the iron and steel industry.