China's Swelling Junkyards Are Readying Iron Ore's Next Threat
- Two-decade steel boom is now poised to initiate a scrap wave
- Investors cautious over risk to top earner for biggest miners
Wheel rims from high polluting vehicles taken off the road by authorities are seen piled up at an auto scrapyard in Zhejiang, China.
Photographer: Kevin Frayer/Getty ImagesThis article is for subscribers only.
As China’s booming middle class junks aging cars and home appliances, the next threat to the world’s ailing iron-ore producers is materializing.
In a country that uses more steel than any other, it’s now become about as profitable to make the alloy by melting down scrap metal as it is from iron ore and coal in a traditional furnace, Bloomberg Intelligence calculates. China’s scrap supply will double in the next decade and then accelerate at an even faster rate, according to Morningstar Inc.