Policy reshapes strategy: China's steel mills using trash as raw material

  Steel mills in China are spending big on equipment that shreds cars and other junk metal for use as raw material, as the government demands to make smoke-stack industries cleaner continues to reshape heavy manufacturing.

Investing in scrap-processing equipment is the latest sign that mills have the cash to spend after bumper margins last year resulting from skyrocketing metal prices. It also indicates that Beijing’s tough rules on pollution are pushing companies to be more efficient.

Scrapyards typically remove paint and other contaminants from used metal, cut it into small pieces and bale it for delivery to factories. But steel plants are