Speaking at the BIR World Mirror on Ferrous Metals event organized by the Bureau of International Recycling (BIR), BIR president William Schmiedel, also president of US-based scrap recycling company Sims Group Global Trade Corporation, has stated that in the second quarter this year the market has been more stable than the previous quarter in which ferrous scrap prices declined $100/mt and that the steel market is looking for a recovery. However, China continues to export a tremendous amount of steel products per month, with the June figure reported as 10.9 million mt for the second-largest monthly total on record.
According to Mr. Schmiedel, China is reported to be cutting 45 million mt of steelmaking capacity this year; however, this effort is yet to be realized as there have been more restarts than closures. Chinese steel enterprises produced over 800 million mt of steel last year despite the capacity cutbacks; therefore, China needs to cut its steel production rather than capacity. “Capacity cutbacks that have no effect on production will not move the needle,” said Mr. Schmiedel.
The BIR president also stated that, in order to see positive developments in the steel market and to overcome the excess capacity problem, three things need to happen: rationalized steel production in China, major reduction in the manipulation of coding and classifications of the steel products by the Chinese government, and a major capital infusion by Beijing into Chinese infrastructure which would help absorb the excess steel production.