The first China-bound containerized heavy recycled steel cargo from Europe, following China lifting import restrictions on the raw material Jan. 1, was being loaded at Glazewing Metal Scrapyard in Norfolk March 17.
The UK trading house Atlas Commodities said it contracted in late February the first European-origin sales for 1,000 mt of containerized PNS material, which falls within the category of China's new HRS101 Heavy Recycled Steel standards, to Chinese trading company Zhejiang Metals and Materials Co.
China has been isolating itself from the global scrap market in a bid to correct its image as a dumping ground for waste metal, introducing restrictions and bans on ferrous scrap imports effective Dec. 31, 2018.
The cargo would load in about 40 twenty-foot containers and is aimed to be on a single ship, with the latest shipment date by end March. It would then be expected to take 40-45 days to reach northern Chinese shores early May, sources related to the matter told S&P Global Platts.
Prior to this, containerized HRS101 exports from South Korea have already entered Chinese shores, having discharged at the country’s eastern and northern ports, trading sources said.
A few market participants cited concerns about material quality and uncertain Chinese customs regulations. For instance, an earlier mid-February UK-origin deal from another UK supplier for containerized shredded material was eventually canceled due to concerns about quality.
“Buy and sell side will have to work out contract terms carefully,” a China-based trader said. “We are all new to this Chinese market, everyone must bear a certain fair level of risk. The first deal usually sees a longer discussion period due to this.”
Recycled steel suppliers continued to be optimistic about Chinese demand for imports as the country eventually aims to achieve net-zero carbon emissions by 2060.
Neighboring Japan and South Korea also aim to achieve carbon neutrality by 2050, which eventually would support greater demand for heavy recycled steel from blast furnace operators.
“China is making efforts through industrial policy to reduce its carbon footprint by making more of its steel from Recycled Scrap Metal rather than from carbon intensive raw materials such as iron ore and we are extremely proud to play our part,” Atlas Commodities CEO Harry Seale said.
Platts assessment of HRS101 in bulk shipments, the world's first price assessment for heavy recycled steel, was at $475/mt CFR China on March 17, down $2/mt day on day.
Source:Platts
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