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China’s scrap independence to impact US market: execs

Keywords: Tags  scrap, steel scrap, China, Jack Stutz, Bob Kelman, SA Recycling, Sims Metal Management, Lisa Gordon

CHICAGO — China’s potential transformation into a net exporter of scrap in less than a decade could impact metal recyclers, industry veterans said at AMM’s Steel Scrap Conference in Chicago.

"China could be a net exporter in the next 12 to 15 years, or at least not a net importer by this time," said Bob Kelman, president of New York-based Sims Metal Management Ltd.’s North America Metals division.

Kelman said some projections show China could be self-sufficient as early as 2022, with other forecasts suggesting this won’t happen until 2030. "It is going to come and it is going to come fairly quickly," Kelman said, noting that China is capable of melting 700 million tons a year and already exports 65 million tons of finished steel products.

Jack Stutz, chief operating officer of Orange, Calif.-based SA Recycling LLC, said the inevitable paradigm shift won’t be crippling, noting that most of China’s steelmaking capabilities rely on other inputs and the country isn’t operating at its full potential.

"Most of their steelmaking is integrated and they don’t buy as much as you would think," Stutz said.

SA Recycling is a large scrap exporter and has already learned to react quickly when one offshore customer reduces its appetite. "We are pretty used to this now and investigate freight rates around the world. So when our business slows we are able to be flexible and ship in one area when another area slows down," he said. "At some point China will be self-sustained, but I don’t see it as an issue for U.S. scrap processors."

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