Australia’s nemesis, The Global Times, is back today with more Australia bashing:
#Australia has good reason to diversify its #ironore exports to #China ASAP. According to Rafael Suchan, CEO of Germany’s Scholz Recycling Group, China’s iron ore imports will be nearly halved by 2030 with the help of steel scrap #recycling. pic.twitter.com/X9mEJmoekD
— Global Times (@globaltimesnews) June 8, 2021
The halving number is still but I am inclined to agree that the falls will be heavy. Scrap will play a role. At the current rate of increase it will absorb roughly one-third of steel production in China:
The bigger problem is that this will coincide with big falls in steel output as urbanisation winds down. Recalling that at 64%, China is already approaching the 80% urbanisation rate of most developed markets:
So, if steel output falls 20% while scrap output rises to one-third of output then we will see a swing in Chinese iron ore demand of minus half a billion tonnes which is not half its iron consumption but is pretty close to half its import volumes:
That’s not all of the Pilbara but it’s two-thirds of it!