In this memo, we will evaluate the future approach of the Asian iron scrap market. In this sector, China, Japan and Vietnam play a key role. In this area, many fluctuations have been observed in the consumer and export markets over the past year, and the corona is one of the most important factors in this fluctuation. In the following, we will examine the different angles of this issue. Please be with Artan Press
*** A look at the performance of Asian scrap production and export
Asian steel scrap imports fluctuated sharply from one country to another in 2020, with South Korea and Bangladesh reporting that while Taiwan and Vietnam saw increases in consumption and exports, the two countries saw declines in both components. Have registered. Japan, Asia’s largest supplier of steel scrap, exported 9.39 million tonnes of raw material last year. This is more than one-fifth more than the 2019 data.
*** The prominent role of Vietnam in the performance of Asian scrap
Last year, Vietnam was the second largest exporter of scrap iron to the Asian market after Jan. With 3.40 million tons of exports, the country has shown an unimaginable increase of 54.7 percent over the previous year. But South Korea’s imports of Japanese goods fell 26.6 percent from a year earlier to 2.95 million tons. With the resumption of large-scale scrap imports into China, further uncertainties emerged in the Asian scrap market in January 2021. China imported 221,409 tons of scrap in the first five months of 2021, an increase of 2,894% over the same period in 2020. Imports from Japan were only 166337 tons. The fast market monitored detailed reports in this area after China’s strong entry into the iron ore game.
*** Significant growth of scrap activity in the Vietnamese market
It is not bad to evaluate the performance of this country under the pretext that last year we witnessed an unimaginable growth of scrap iron exports from Vietnam. Vietnam’s scrap iron imports hit a five-month high in May due to buyer re-stockpiling and rising prices from January to April. Vietnam customs data show that imports in May reached 708,326 tons with a monthly growth of 18.2% compared to April
*** Assistance of Asian iron scrap to the deplorable emissions of iron ore
The current trend of Asian iron scrap can partially offset the deplorable state of the iron ore sector. Five factors can lower the price of iron ore. Between 2012 and 2016, a good roadmap emerged on how to burst the iron ore price bubble, although this time it looks set to happen more quickly. But what are these five factors? First: Brazil returns to full production of about 380 million tons per year with the aim of increasing to 400 million tons. Annual production is projected to be around 335 million tonnes this year, which seems to be increasing. Second, iron ore consumption in China is declining as the impact of stimulus measures diminishes. Third, high prices increase the incentive to produce. The mines that were closed after the storm have recently reopened. Fourth: Newcomers to the iron ore market increase iron ore production. Fifth: In the medium term, China will naturally move towards the use of electric arc furnaces.
*** Electric arc furnace and the use of scrap iron
Changing these patterns will strongly highlight the role of scrap metal in the market in the coming months of 2021. The issue of electric arc furnaces and the use of scrap iron as feed will be a growing issue. These furnaces use scrap and electricity to produce steel instead of iron ore and coke. As a country’s economy matures, scrap steel production increases from worn-out buildings and recycled machines. In the United States, 70% of steel is produced by electric arc furnaces. In China, the figure is only 15 percent.
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