The steel industry can often benefit in unexpected ways from environmental policy. Here, restricitons on vehicles increase the supply of ferrous scrap. It is worth noting that the vehicles will also have to be replaced with more efficient models, increasing demand.
SBB 21 April More than 400,000 high-polluting vehicles will be removed from Beijing’s roads within the next five years to reduce the city’s carbon emissions, Chinese environmental authorities pledged on 19 April.
The elimination of these cars will increase China’s ferrous scrap resources, Steel Business Briefing notes. Indeed, some leading scrap recyclers in the country have already started to enter the vehicle dismantling field to increase their ferrous scrap resources.
Chiho-Tiandi Group, a major scrap metal company based in eastern China’s Taizhou city, decided to purchase a 51% stake in a vehicle dismantling company in Beijing at the end of January. The investment will give the company a vehicle dismantling capacity of 100,000 units/year.
China Metal Recycling, one of China’s largest scrap recyclers, is also going to set up a scrap processing plant in southern China’s Guangdong province. The plant will have annual vehicle dismantling capacity of 300,000 units when commissioned, as SBB reported.
According to statistics from China Association of Metalscrap Utilization (CAMU), the volume of ferrous scrap purchased domestically reached 51m tonnes in 2010, representing a year-on-year increase of 5.2m t or 11.4%.
“Scrap resources recycled from dismantled vehicles have contributed a lot to the increase, and it is expected that more scrap will be generated by this sector with the rapid development of the Chinese economy in the next few years,” a CAMU official tells SBB.