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The move is one of China’s new incentive policies for the resource recycling industry, according to a statement from the country’s ministry of finance on Thursday June 25.

The China Assn of Metalscrap Utilisation (Camu) has been lobbying the government on the tax rebate for many years and it was understood that its original aim was for a 50-70% payback.

“[The tax rebate] is not as high as expected, but it’s better than nothing,” a trading source told Steel First.

“We’re likely to see scrap prices come down in the near term as the tax rebate means a cut in costs,” said Ginger Ding, an analyst at Steel First sister company Metal Bulletin Research.