At the time, it chalked it up to government policy requiring basic oxygen furnaces to increase consumption.  But now, the organization says it has a more thorough explanation: the consumption hadn’t been reported until now. 

In a statement, the organization explained that scrap that had been feeding China’s now-closed induction furnaces had not been included in official statistics. Once the furnaces closed, the scrap was diverted to BOFs and EAFs, and, as a result, is now appearing in official data. 

“Estimates indicate that steel scrap use in the country’s induction furnaces was around 60 million metric tons in 2016 – and yet these volumes did not feature in official statistics," it said.

"Following the closure of the induction furnaces, most of this 60 million metric tons of steel scrap was used last year by China’s basic oxygen furnace and electric furnace steel producers. That was the reason behind China’s sharp increase in steel scrap usage in 2017,” the organization said. 

Nevertheless, the increase in scrap usage is in line with China’s plans to use more in domestic steel production, it said.