To the Editor: A story in the Nov. 12 edition, titled China's scrap use to rise to 20 percent in '15, describes China's plans to increase its use of steel scrap to 20 percent of all raw materials for steelmaking by 2020.
To achieve this, the China Iron and Steel Association (Cisa) has announced that China will increase its scrap consumption by one-third or more. There are reports that to reach this goal, Chinese steel producers intend to double imports of scrap from the United States and Australia in the near future.
The Chinese government and the Chinese steel industry are naive if they think that China can simply increase imports to comply with government directives to use more scrap. The supply of globally tradeable scrap has remained essentially steady since 2004. The major scrap exporters-including the United States, Japan, the European Union and Canada-have well-developed recy cling networks, but these networks are operating at or near capacity. There simply is not enough scrap available in these countries to increase exports to China significantly.
The Chinese government and Cisa have it exactly backwards. The expansion of China's scrap supply must precede any expansion in the consumption of scrap by Chinese steelmakers. Alternatively, China could do what many producers in other countries are doing in the face of limited global scrap supply: turn to alternative iron units, such as pig iron, direct-reduced iron and hot-briquetted iron.
The plan to increase scrap imports also highlights the hypocrisy that underlies China's approach to trade in steelmaking raw materials, as China itself imposes tough restrictions on exports of steel scrap. If China keeps any increase in scrap consumption in line with increases in its domestic scrap supply, and eliminates the restrictions it places on exports of scrap, it will have demonstrated that it is ready at last to become a responsible member of the world steelmaking community.