China’s Property Market and Steel Scrap Imports: Key Trends, Economics, and Actionable Insights for 2025 and Beyond

China's property slump, record steel exports, and new carbon rules are reshaping scrap import economics in 2025. Mills kept output resilient by selling more abroad while homebuilding stayed weak. That mix tightened local obsolete scrap supply and strengthened the case for compliant foreign cargoes, especially at coastal EAFs. Standards, power, currency, and carbon now set parity at the gate. Reuters+1

Table of contents

The Macro Picture: China's Property Market at a Crossroads

Market Drivers for Steel Scrap Imports

Scenario Analysis: Possible Futures for Scrap Flows

Actionable Takeaways for Buyers and Sellers

FAQs

Conclusion

The Macro Picture: China's Property Market at a Crossroads

Real estate is still the drag. Property investment fell 10.6 percent in 2024 and new starts dropped 23 percent. Sales by area declined 12.9 percent. Through mid-2025 the slide persisted, with NBS showing weaker starts and completions and a slow sales recovery. Policy support narrowed the declines in early 2025, but the inventory overhang kept pressure on prices outside core cities. Infrastructure and selected manufacturing picked up some slack, shifting demand away from rebar-heavy residential builds. State Council Information Office+3Reuters+3National Bureau of Statistics of China+3

Steel output eased in 2024, yet exports surged to 110.72 million tonnes, the highest since the mid-2010s. That kept blast furnaces hot despite weak domestic consumption. It also invited more trade actions, which now feed back into melt schedules and raw-material choices. Reuters

Domestic obsolete scrap supply remained tight. Analysts and trackers estimate 2024 consumption a little above 200 million tonnes, with only marginal growth in 2025 as the installed asset base ages. The long-term path points toward 300 million tonnes later in the decade, but that does not solve the current squeeze. MySteel

Market Drivers for Steel Scrap Imports in 2025 and Beyond

Standards and inspections define what clears.

China reopened ferrous scrap in 2021 by classifying compliant material as "recycled iron and steel raw materials" under GB/T 39733-2020. Customs issued inspection rules in June 2021 and adjusted the list of HS codes that require arrival inspections. The import tariff on key 7204 lines was set at zero in 2021 and remains the policy anchor for compliant cargoes. In 2025, authorities advanced a revision process to tighten sampling, impurity, and documentation language. The direction is clear. Clean, well-specified metallics pass. RMI+3Stanch+3Metal News+3

The practical thresholds matter.

Industry guidance and P&I advisories highlight residuals, combustibles, radiation, and trace elements that inspectors check against. Cargoes that mirror the standard's wording in packing lists and pre-shipment lab sheets face fewer delays at berth. RMI

China keeps a 40 percent export duty on ferrous scrap.

That keeps material onshore and reinforces the policy bias toward net imports rather than exports. VU Research

Carbon policy now carries a price tag.

In 2025, China expanded the national ETS beyond power, with steel entering the compliance net on a phased basis. Benchmarks and allocation rules raise the relative cost of BF-BOF tonnes versus EAF tonnes. More scrap in the charge lowers allowance exposure. The policy arc points to tighter caps later in the decade. TrendEconomy+1

EAF adoption is growing from a low base.

The official goal calls for a 15 percent EAF share by 2025 and around 20 percent into the 2030s. Actual share is still near 10 percent. Utilization dipped in early 2025 as margins tightened and scrap availability constrained runs. Capacity keeps coming through the capacity-swap channel, and leading groups are pairing DRI with new EAFs to stabilize metallics. Recent examples include Baowu's hydrogen-rich DRI plus EAF integration at Zhanjiang and new large EAFs ordered by Shougang and mills in the Tangshan cluster. These projects increase pull for high-quality grades and reliable import lanes into East and South China. Climate Bonds+2S&P Global+2

Currency sets CIF parity.

Scrap trades in dollars. A two to three percent swing in USD/CNY often flips import parity. On 12 November 2025 the yuan traded near 7.12 per dollar, up roughly 2.5 percent year to date. Banks flag a 6.90 to 7.30 range into 2026. Plan bids and parity windows around live FX, not last quarter's average. Reuters

Power prices steer EAF run-rates.

Industrial users face time-of-use pricing with wide peak-to-valley spreads in many provinces. Updated 2024–2025 rules formalized floating ratios and introduced deeper valley blocks in some regions. Plants that hedge power and shift melts into valley hours keep intake steadier and clear imports more often. RMI

Origins and supply-chain adaptation are visible in the data.

Japan, South Korea, and Malaysia remain the most reliable origins for China. Malaysia's 15 percent export duty, in force since March 2021, pushed suppliers to add pre-processing and tightened documentation. Customs data show China's April 2025 ferrous scrap imports at 31,373 tonnes, a 15-month high, as standards and practice settled. S&P Global+1

A live parity example shows the mechanics.

The Kanto tender in October 2025 cleared around 44,316 yen per tonne FAS for H2. That translated to roughly 289 dollars at the time. Add short-sea bulk freight into East China and you get a CIF example in the low 320s per tonne before taxes and fees. With USD/CNY near 7.12, that implies around 2,290 to 2,300 yuan per tonne before VAT. Small moves in FX or freight can tip the decision against domestic substitutes.

Scenario Analysis: Possible Futures for Scrap Flows

Base case for 2025–2026.

Property stays weak. Infrastructure and selected manufacturing steady the floor. Exports remain high but face more friction. ETS coverage nudges scrap ratios higher in BF-BOF and supports incremental EAF hours. Imports rise from a small base as standards stabilize and FX holds within the current band. Reuters+1

Stronger carbon, firmer yuan.

Tight allocation or absolute caps deepen after 2026. A firmer yuan lightens dollar inputs. Mills lift scrap charges and shift melts into valley blocks. Pull for documented H2, shredded, and P&S from Japan and Korea strengthens. Reuters

Trade pushback on finished steel.

New anti-dumping measures narrow export margins. More tonnage pivots to domestic customers. Melt calendars change within weeks. Scrap appetite adjusts by route and region, with coastal EAFs remaining the marginal buyer when parity lines up. S&P Global

Policy slippage or FX shock.

A weaker yuan or stricter terminal checks pause intake. Imports slow, then resume when parity improves or guidance clarifies. Optionality on grade and origin remains the best hedge. Fastmarkets

Actionable Takeaways for Buyers and Sellers

Write your paperwork to the standard.

Use GB/T 39733 language in contracts, packing lists, and lab reports. Include radiation, residuals, and composition sheets that match annex wording. It cuts inspection risk and shortens berth time. RMI

Price in yuan and dollars at the same time.

Refresh FX intraday. Map your time-of-use tariff to your melt plan. A two to three percent FX move can flip parity for a marginal cargo. Reuters+1

Track the ETS calendar and allocation notes.

Lift scrap ratios during compliance quarters. Push valley-hour melts where the tariff spread is wide. TrendEconomy

Build an origins ladder.

Japan and Korea for consistency and documentation. Malaysia for windows, with duty and inspection rules understood. Confirm any 2025 standard clarifications on mixed-grade allowances before booking. S&P Global

Watch China's export headlines.

Changes in finished-steel margins ripple into scrap buying within a month. Adjust shipment windows to that rhythm. Reuters

FAQs

Why did China reclassify ferrous scrap in 2021?

To allow compliant metallics to enter without solid-waste controls. GB/T 39733-2020 defined specs and tests. Customs followed with inspection rules and HS adjustments. Stanch+1

Is the import tariff really zero?

Yes, on key 7204 lines under the recycled materials category since 2021. VAT still applies. Check current customs practice on your HS line. RMI

How much scrap does China consume today?

Around the low-200-million-tonne range in 2024, with tight supply when mills lift scrap charges or EAFs accelerate. MySteel

What is the status of steel in China's ETS?

Steel entered the national system on a phased basis in 2025. Allocation tightens over time, with a shift toward more binding caps later in the decade. TrendEconomy

Where are imports coming from now?

Mainly Japan, South Korea, and Malaysia. April 2025 volumes hit a 15-month high at 31,373 tonnes as practice settled. MySteel

Conclusion: Staying Ahead in a Volatile Market

The 2025 playbook is straightforward. Standards control the gate. Carbon costs rise. EAF capacity is commissioning from a low base. FX and power shape marginal clears. Keep documents tight, parity sheets live, and origin options open across Japan, Korea, and Southeast Asia. Track ETS milestones, new EAF starts, and export headlines. That is how imported scrap will keep gaining share in China's melt as the property cycle fades and lower-carbon output takes priority. Stanch+2TrendEconomy+2

Key sources used

NBS releases and Reuters for property and trade data; GACC, Mysteel, and Fastmarkets for scrap flows; GB/T 39733 text and Customs inspection rules; OECD on export duties; Carbon Pulse and Reuters on ETS expansion; RMI and provincial notices on time-of-use power pricing; Reuters on Kanto tender and currency levels. Reuters+10Reuters+10National Bureau of Statistics of China+10

Appendix A) Data Annex, monthly series and definitions

Purpose.

Give readers the shape of the curve, not single points. Update monthly.

Series, 2024 M01–M12, 2025 YTD by month:

Crude steel output, total and by route if available.

Finished steel exports, by product group.

Ferrous scrap imports, by origin and grade, and by receiving port cluster.

Domestic scrap consumption, split into obsolete and prompt if available.

Apparent steel use and inventory indicators.

USD/CNY monthly average and range, bulk and container freight on key lanes, peak and valley industrial tariffs for two coastal provinces.

For each series, include:

source title, issuing body, release date, and a one-line note on coverage and revisions.

Appendix B) GB/T 39733 quick-reference, thresholds and sampling

Use the current text of GB/T 39733. Print the numbers your teams need for packing and inspection.

Copy these items verbatim from the latest standard and annexes:

Total non-metallics maximum percent by weight. [Insert latest value from GB/T 39733-2024]

Combustible content maximum percent. [Insert value]

Moisture protocol and limits, if specified. [Insert value or test reference]

Prohibited items list, for example pressurized vessels, sealed containers, medical or municipal waste.

Radiation criteria and test procedure, including acceptable dose rates and instruments.

Sampling method, sample mass, increment count, acceptance criteria.

Documentation language requirements, preferred photo evidence, labeling.

Note on practice.

Add one paragraph on how local inspectors apply the rules in your main ports, for example Ningbo-Zhoushan and Shanghai, and the most common clarifications granted in 2025.

Appendix C) ETS cost primer, formulas and worked example

Goal.

Turn narrative into numbers you can plan against.

Formulas:

Allowance cost per tonne steel = emissions intensity (tCO2 per t) × allowance price P.

Cost delta from higher scrap ratio = (intensity before − intensity after) × P.

Illustrative example, replace with your plant data:

Assume BF-BOF direct intensity 2.0 tCO2 per t. Assume EAF direct intensity 0.5 tCO2 per t. Assume P = 70 yuan per tCO2. Then:

BF-BOF allowance cost ≈ 140 yuan per t. EAF allowance cost ≈ 35 yuan per t. A 10 percent increase in BF-BOF scrap ratio that lowers intensity by 0.05 tCO2 per t saves about 3.5 yuan per t at P = 70.

Notes:

Use your measured intensities and allocation to avoid errors.

Re-run the numbers for compliance quarters.

Add power cost impacts for EAF valley scheduling.

Appendix D) Parity mini-model, FX and freight sensitivities

Steps:

CIF_yuan_per_t = CIF_USD_per_t × USD_CNY.

Landed_yuan_per_t_before_VAT = CIF_yuan_per_t + domestic fees and adjustments.

Sensitivity to FX: Δparity_yuan_per_t ≈ CIF_USD_per_t × ΔUSD_CNY.

Sensitivity to freight: Δparity_yuan_per_t ≈ Δfreight_USD_per_t × USD_CNY.

Worked example:

Base case. CIF 320 dollars per t, USD/CNY 7.12. Parity ≈ 2,278.4 yuan per t before fees and VAT.

FX move, +2 percent. USD/CNY becomes 7.26. Parity rises about 45.6 yuan per t.

Freight move, +10 dollars per t. Parity rises about 71.2 yuan per t.

Use this sheet to set bid stop-outs and yes/no triggers.

Appendix E) Trade-measure log template

Keep a running, dated log. Update weekly.

Columns:

Jurisdiction and measure type, for example anti-dumping or safeguards.

Products or HS lines affected.

Date in force and review dates.

Estimated margin impact per tonne or percentage.

Mill response, for example export reduction, domestic pivot, product mix change.

Observed effect on scrap intake by route and region.

Add two to three lines per month that matter for your lanes.

Appendix F) Inspection and documentation checklist

Attach this packet to the draft LC and booking email.

Contract, packing list, and invoice written in GB/T 39733 language, with HS mapping.

Composition statement with residuals, impurity declaration, and combustible content statement.

Moisture protocol or measurement notes when applicable.

Radiation scans, instrument details, time stamps, and photos of the gauge.

Bale photos, inside and outside the container or hold, including labels and tags.

Sampling records aligned with the standard, with sample mass and increments.

Certificates from recognized labs where required.

Three common failure points and fixes:

Mixed-grade lots not labeled to spec. Fix by relabeling and re-issuing composition sheets.

Incomplete radiation documentation. Fix by attaching instrument proof and re-scanning.

Ambiguous impurity statements. Fix by aligning language with the exact clause and annex wording.

Appendix G) Three case studies, 2025 import runs

Case 1, Japan H2 short-sea, October 2025.

Context. Kanto tender cleared near 44,316 yen per t FAS, about 289 dollars at the time. Short-sea bulk freight into East China placed CIF in the low 320s dollars. USD/CNY near 7.12 implied about 2,290 to 2,300 yuan per t before VAT. Cleared because FX firmed, domestic obsolete was tight, and the buyer had valley power blocks for EAF runs.

Case 2, South Korea plate and structural, August 2025, indicative.

Context. Premium P&S in handy bulk sized at 20 to 25 thousand tonnes. Documentation mirrored GB/T language, including radiation and impurity statements. CIF cleared against domestic parity due to lower impurity deductions and a short dwell at berth. Use your port's 2025 impurity and sampling guidance to validate.

Case 3, Malaysia mixed-grade under clarified practice, May 2025, indicative.

Context. Suppliers pre-processed to meet impurity rules and attached full annex-style documentation. A clarified approach to mixed-grade acceptance allowed the lot to clear. CIF parity worked due to a brief dip in short-sea freight and a stable USD/CNY print. Confirm your terminal's current stance before booking similar lots.