China’s Ministry of Finance released new import and export tax rates for 2021 on 23 December. The rates cut taxes for ferrous scrap, whose import will be permitted from 1 January, as Kallanish previously reported.

The notice also confirms that scrap imports will be charged according to the most favoured nation (MFN) rate after ferrous scrap was removed from import restrictions. China’s new MFN rates on most kinds of scrap will be cut from 2% to 0% for 2021. This applies to HS codes 720421, 720429, 720449 and 720450. Imports under HS codes 720410, 720430 and 720441 will continue to be charged a 2% MFN duty.

The notice has sparked global interest in scrap trade to China. On 23 December sources in Europe said there had been interest in purchasing scrap for the Chinese market. In China, however, import traders have been holding back buying because of volatile prices.

China could import significant volumes of scrap in 2021, if prices are attractive. One major state-owned resources company is understood to be aiming to secure around 1 million tonnes of scrap, mainly from Japan, the USA and Australia in 2021. International scrap prices have increased to match Chinese domestic levels, however.

In East Asia, scrap prices have been driven higher and local electric arc furnace mills are already considering increasing use of alternative inputs such as pig iron and direct reduced iron. Prices for HMS 1&2 80:20 jumped $55/tonne on-week to $440/t cfr Taiwan on 23 December.