Chinese steelmakers propose adding scrap metal to the list of strategically important resources

The China Iron and Steel Association (CISA) has proposed that the government add steel scrap to the list of strategically important resources. This was discussed at the association’s meetings on the green and low-carbon development of the country’s steel industry, which took place at the end of June.

As noted, since the current level of scrap management and utilization in the country is incompatible with its future position in the Chinese economy, it is recommended to include this raw material as a strategic resource in the 5-year national economic and social development plan. It is also proposed to accelerate the pace of industrialization, regionalization, and productization of the scrap processing industry, and to create a system for its processing, classification, treatment, and distribution that is adapted to the structure of the country’s metallurgy.

The CISA Low Carbon Development Working Group stated that it is recommended to clarify the method of accounting for corporate income tax for steel scrap processing. It is also proposed to study the preferential VAT policy for imported processed steel raw materials and to increase the tax refund rate for materials for steel furnaces.

As GMK Center reported earlier, starting in August of this year, the Chinese government will ease restrictions on scrap imports and allow the supply of battery recycling residues, known as “black mass.” The changes provide for a relaxation of quality standards and the admissibility of mixed grades.

According to market experts, this move could increase steel scrap imports to the country to over 1 million tons per year, a sharp increase from less than 200,000 tons in 2024. Although this is a positive trend for more environmentally friendly steel production, the volume remains modest compared to the 1.2 billion tons of iron ore imported last year.