China Metal Recycling Holdings chairman Chun Chi Wai has said that China will use more recycled material in steel production over the next three years.

In an interview with Bloomberg, he said that scrap metal may account for around a fifth of steel production in China by 2015 compared to 14 per cent now. This will put pressure on iron ore prices as a result.

Steel production in China fell in August to its lowest level in six months, while steel prices are at their lowest level since 2008.

China Metal Recycling Holdings, which represents about six per cent of China’s scrap metal market, plans to expand its use of scrap metal as it is more energy and cost-efficient than using iron ore.