China's Scrap Steel Exports Skyrocketed Last Year After Ditiaogang Ban
Xu Wei
/SOURCE : Yicai
China's Scrap Steel Exports Skyrocketed Last Year After Ditiaogang Ban

(Yicai Global) Feb. 22 -- China's 2017 scrap steel exports multiplied to more than 2.2 million tons from around 1,000 after the country banned domestic sales of ditiaogong, or steel made from waste metal.

Most exports went to Indonesia, Thailand, Vietnam and other Southeast Asian countries, state-owned news agency Xinhua reported, citing data from the China Iron and Steel Association. The biggest suppliers were China's eastern and southern coastal provinces, such as Guangdong, Jiangsu and Zhejiang.

Chinese firms looked to ship scrap steel overseas despite a 40-percent tariff after the ban became effective. The prohibition cut ditiaogang production by 140 million tons last year as authorities sought to reduce excess capacity in the sector, the report added.

There are two main steelmaking processes: using a basic oxygen furnace or a more modern electric-arc furnace.  The newer method uses scrap steel as a key production material and makes up around 6.5 percent of China's steel production, compared with about  45 percent in other countries, according to the World Steel Association.

China primarily adopts the BOF approach, which uses raw materials but is more economically efficient thanks to the declining price of iron ore and the high cost of electricity. The country plans to make EAF production more widespread this year, an official at the Ministry of Industry and Information Technology said.

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Keywords: Steel , Export , Scrap Steel , Ditiaogang , Metals