Ferrous scrap dealers have been among those amazed at the booming Chinese steel industry, and they have helped adjust scrap flows to supply what is now the world’s largest steel producing nation (by far).
But as amazing as the surging Chinese economy may be, John Harris of Mittal Steel NA, Chicago, says their have been prior economic booms that the scrap and steel industries have weathered.
In a presentation at the 2005 ISRI (Institute of Scrap Recycling Industries Inc.) Commodities Roundtable Forum, Harris outlined current global ferrous scrap flows and remarked on future projections.
“The main focus the last few years has been scrap going to China,” said Harris, “but it’s always been going to the Far East.”
A map presented by Harris showed scrap shipping patterns showing flows from the U.S., South Africa, Australia and Europe all going to China. Additionally, some scrap is being exported from Japan to China, which caused Harris to make a point about scrap flow history and a likely future trend.
Demand for imported ferrous scrap in China “has leveled off, and it may well recede,” said Harris. This is in part to slower steel industry growth as well as the decision to install primarily basic oxygen furnaces rather than scrap-dependent electric arc furnaces.
Historically, Harris noted that Japan was a long time “net importer of scrap, but now it is an exporter. For Japan, that process from a growing post-war steelmaker with a hunger for scrap to a developed economy that could export scrap took about 40 years, he added.
It is not certain how long it will take for China to be self-sufficient in scrap, but Harris said the prediction that it will be at some point is a safe one. “This is a phenomenon that has been repeated,” he stated.
The ISRI 2005 Commodities Roundtable Forum was held in suburban Chicago from Sept. 20 to Sept. 22. Some 600 brokers, traders, processors and suppliers gathered for the educational and networking event.