Why do we import iron ore at high prices instead of using scrap steel?

Since the 21st century, my country's economy has developed rapidly, which has also driven the development of my country's steel industry. However, with the sharp increase in demand for iron ore, the price of iron ore has also continued to soar.

Data show that since 2000, my country has imported 11.67 billion tons of iron ore and spent US$1.0628 billion in foreign exchange, of which foreign exchange was spent in the three years of 2011, 2013 and 2019. The import volume exceeded 100 billion US dollars, and from 2015 to 2019, the import volume exceeded 1 billion tons for four consecutive years, and the foreign dependence was as high as over 80%.

Since my country’s steel demand is so huge and iron ore must be imported at high prices, why can’t scrap steel be used instead of iron ore?

As an important basic industry of the national economy, the steel industry is one of the most promising industries in the world's industrialization process. As an important basic industry of the national economy, the steel industry is the industrial backbone that supports national development and economic construction. It is also It is an important symbol that reflects the comprehensive strength of a country.

In the past 100 years or so, the steel industry has developed rapidly, with certain improvements in output value, product structure, and industrial technology. After entering the 21st century, steel is still an irreplaceable raw material for mankind. At present, our country is in the process of industrialization and is transitioning from a large manufacturing country to a strong manufacturing country. The steel industry is a pillar industry of the manufacturing industry. Therefore, steel has great significance for building a large manufacturing country. important meaning.

Based on the current situation, with the rapid development of my country's steel industry in the past decade, my country's iron ore imports have increased year by year, and a trend of globalization of iron ore resources has formed.

As the world's largest steel consumer and producer, China has always had a relatively large demand for steel, and iron ore is the primary raw material for making steel, so iron ore plays a decisive role. At present, the world's iron ore resources are mainly concentrated in Brazil and Australia (accounting for 70% of global reserves). Therefore, China's iron ore resources mainly rely on imports. Why doesn’t our country use scrap steel?

First of all, although my country's iron ore resources mainly rely on imports, this does not mean that our country does not utilize scrap steel. It is reported that our scrap steel utilization productivity accounts for 11%, while the utilization rate of scrap steel in the United States Up to 70%. Secondly, the reason why my country imports iron ore at high prices instead of using scrap steel is mainly for the following reasons:

First, the grade of iron ore in China is very low, and the iron ore areas are mainly concentrated. In the four regions, namely the Northeast Mining Area, North China Mining Area, Central South Mining Area and East China Mining Area, most of them are lean iron ores, with grades mostly within 12%-20%. Only a very small amount of ore can reach 32%, and the quality is generally not high. The types of ore are relatively complex and difficult to screen, which greatly increases the cost of mining, beneficiation, smelting and other processes. In order to reduce costs, our country has to import a large amount of iron ore from abroad. Although the import price is higher, compared with It is much more economical to extract and process low-grade iron ore;

The second is that the annual recycling volume of scrap steel in my country is relatively low, and the scrap steel recycling industry is scattered and not centralized, with fewer recycling companies. According to estimates, my country's current annual steel demand is about 870 million tons, and my country's annual scrap steel is only about 200 million tons. Even though all these scrap steel are recycled and utilized, there is still a large gap between the actual demand and support. The development of my country's steel industry cannot be maintained, so my country must import iron ore from abroad to ensure the development of my country's steel industry;

Thirdly, the scrap steel recycled has different textures, and the sources of scrap steel are relatively wide. They also contain a lot of impurities, which causes their quality to vary. Recycling cannot directly produce high-quality steel that meets our needs. Moreover, my country's current scrap steel production process is difficult to produce uniform steel. Reused steel of quality standards.

To sum up, as the world's largest steel producer, my country is also the world's largest consumer market for bulk raw materials such as iron ore. Due to the small amount of scrap steel used, it has been deeply poisoned by the rapid rise of iron ore. , but the fact is that it is not that our country does not want to use scrap steel, but that taking into account the current status of our country's steel industry, cost prices, etc., we have to import a large amount of foreign iron ore, but at the same time, we are also actively developing the steel industry, It can be expected that the use of scrap steel will gradually increase in the future.