Scrap metal dealers must adjust their business models due to rising Chinese exports of semi-finished and finished steel, according to the Bureau of International Recycling (BIR).
Various global steel trade associations have continued to voice their distress about Chinese steel overcapacity to their respective government agencies, according to the organisation.
BIR said in its quarterly report that the rise comes in spite of the material’s prices decreasing and iron ore becoming more expensive.
New duties on Chinese imports are likely, said the bureau, due to more anti-dumping investigations being launched.
President of BIR ferrous division William Schmiedel said: “The overhang of Chinese steel in our markets has inevitably become the new normal.
“Until trade barriers become effective or China’s domestic demand for steel increases, we must be one step ahead and adjust our business models accordingly.”
BIR board member Tom Bird said: “The constant flow of cheap Chinese billet does not bode well for the next two quarters. A great deal will depend on how far this affects demand and pricing for steel scrap.”
There have been fewer purchases of ferrous scrap from Turkey due to political uncertainty resulting from its election causing the economy to slow, Schmiedel added.
He also said temporary export restrictions from Russia were a possibility due to the country including ferrous metals on its list of essential commodities for its domestic steel market.