A leading figure in the metal recycling industry has raised concerns over an increase in Chinese steel billet exports.
Tom Bird, the outgoing president of the European Ferrous Recovery & Recycling Federation (EFR), said that the recent fall in ferrous scrap prices coincided with increased exports of Chinese steel billet – a section of steel used for rolling into bars, rods and sections.
Bird also said that the billet was being sold as square bar, which is a finished product, to circumvent higher tax rates on billet.
He has suggested that importing authorities in the EU and the US who were “uncomfortable” with billet being treated as square bar, could be forced to act.
Writing in the BIR’s latest World Mirror, Bird said that billet exports from China were establishing a market among mills in Turkey. Meanwhile, the price of scrap steel had dropped by $15 (£9) a tonne, he said, a fall reported in the latest issue of MRW.
Bird said: “Clearly with Turkey, Egypt and elsewhere able to buy billet at these levels, the market will be affected. On the positive side, despite the Eastern Mediterranean market being hesitant about buying scrap at this stage, there is still a strong ongoing requirement.”
The high levels of Chinese export had “thrown a spanner in the works” of the scrap steel industry across the EU, and the market could expect lower demand over October before seeing a correction by the end of the year.
Meanwhile, the Wall Street Journal has reported that Chinese exports of steel products rose to a record during September, totalling 7.2 million tonnes.
According the newspaper, “Chinese mills habitually use exports as a means to bolster sagging domestic sales, which has often threatened to swamp global markets and led to trade friction with major importers such as Europe and the US”.