Chinese steel mills used more scrap in H1 2018

Steel mills in China increased usage of scrap in the first half of 2018, with big steelmakers boosting the ratio of scrap in their converters, Li Shubin, Executive Vice Chairman & Secretary General of the China Association of Metalscrap Utilization, said Thursday.

At the China Iron & Steel Association conference in Dalian, Li said 87.72 million mt of scrap was used by Chinese steelmakers in H1 2018, with 180 million mt estimated for the whole of 2018. They used 148 million mt of scrap in 2017, up 64.2% from 2016. In 2017, 65% of scrap was used in converters while 35% was used in electric arc furnaces, Li said.

At the same time, Chinese steel mills added 19.4% of scrap as feedstock blendings in H1 2018, compared with 17.8% in 2017 and 6.6% in 2016, Li said.

There are more EAFs online this year which stimulated usage of scrap. In addition, the Chinese government placed a strict production control policy on steel producers this year to improve the environment, encouraging steel mills to add more scrap into converters to lower emissions.

A private steel producer in Hebei confirmed that the use of scrap increased this year because of strict environmental controls.

"We added 21%-22% scrap in the converter now, which increased from last year on stricter production controls," they said.

Shagang steel, the biggest private steel producer in China, used 25% scrap in converters, and average use of scrap is 30% including EAFs, Li said.