The national standard in "Recycled Iron and Steel Raw Materials" is released
China's "Recycled Iron and Steel Raw Materials" national standard has been officially released recently and will be officially implemented on January 1, 2021. This standard will maximize the exploitation of international and domestic recycled steel raw material resources, improve the recycling rate of iron resources, and increase effective options for steel companies.
What impact will the national standard of "Recycled Iron and Steel Raw Materials" have on steel companies, the iron ore market and subsequent policy fields?
It is understood that from the perspective of supply, the sources of scrap steel can be mainly divided into domestic scrap and imported scrap. Due to restrictions on scrap imports, the amount of imported scrap is almost stagnant; domestic scrap can be divided into self-produced scrap, processed scrap and depreciated scrap. Depreciated steel scrap is the largest source of steel scrap, and it is also where the increase in scrap recycling in the future lies.
In 2019, China's domestic scrap steel resources were close to 190 million tons, and with the increase of social steel reserves, the domestic scrap steel resources continued to expand. The Chinese Academy of Engineering predicts that scrap steel resources are expected to increase by 10 to 15 million tons per year, reaching 290 million tons in 2025 and 330 million tons in 2030. From a long-term perspective, the publication of national standards is conducive to the standardized and intensive operation of the entire industrial chain of domestic scrap recycling, processing, circulation, and utilization, laying a solid foundation for the full utilization of domestic scrap steel resources.
China's active expansion of effective investment this year has also driven steel demand, but due to the sharp rise in iron ore prices, the steel industry has not gained much benefit from it. Increasing the recycling and utilization of scrap iron and steel resources is one of the important means to promote the solution of the issue of guaranteeing steel raw materials. It is against this background that relevant domestic policies to support the development of the scrap steel industry have accelerated.
The price of scrap steel is restricted by supply. Compared with iron ore, whether it can form a relative advantage in price is an important factor in the development of the scrap steel recycling industry. The scale of China's steel savings is large, and the future development of the scrap steel industry is likely to form a scale advantage. The development and improvement of the scrap steel industry chain will promote the steel industry to reduce costs and increase efficiency.
Recycled iron and steel raw materials are charge products that can be used as ferrite resources directly into the furnace after sorting, recycling and processing of scrap iron and steel. Compared with the use of iron ore, steelmaking with recycled steel raw materials can significantly reduce pollutant emissions. Therefore, recycled iron and steel raw materials are not only a renewable resource, but also the only ferrite resource that can replace iron ore. It is an important raw material for the green development of the iron and steel industry.
