By Paul Ploumis (ScrapMonster Author)

April 18, 2016 07:54:58 AM

SEATTLE (Scrap Monster):  The Institute of Scrap Recycling Industries (ISRI) has called for stricter implementation of trade laws to protect the ferrous scrap industry from crisis. Furthermore, the US government and trade leadership should enact all possible measures to curtail excess steel production capacity in China.

In a statement, ISRI’s chief economist Joe Pickard noted that the steel making facilities in the country are passing through extremely challenging situation in over a decade. The dumping of cheaper steel products from China has hurt the trade balance of many countries including the US. The nation’s scrap recyclers too face most difficult market conditions.

The Chinese crude steel production has peaked to over 800 million tonnes per annum during last year. On the other hand, the US ferrous scrap exports to China has fallen sharply when compared with the record levels achieved in 2009. The US ferrous scrap exports to China totaled to less than half-a-million tonne as compared with 5.5 million tonnes in 2009.

The cheaper iron ore prices have boosted steel production by mills in China. At the same time, demand for ferrous scrap by mills dropped sharply. The lower demand is evident from the sharp drop in value of ferrous scrap processed in the USA during the year. Only $18.3 billion worth scrap was processed in the US during entire year 2015, significantly lower when compared with $26.1 billion worth ferrous scrap processed in 2014.

The combination of domestic and global market conditions has led to drastic cut in operations or even permanent closure of recycling facilities. Nearly 100 recycling facilities have been closed during the past two years. Almost 11,000 recycling jobs have been lost during this period. The crisis situation has also led to drop in tax revenues and battered domestic and export sales.

The Institute of Scrap Recycling Industries (ISRI) is a United States-based private, non-profit trade association representing more than 1,600 private and public for-profit companies – ranging from small, family-owned businesses to multi-national corporations—operating at more than 6,000 facilities in the United States and 30 countries worldwide.