Sorry, but this is not correct. At the time of this writing, China's total crude steel capacity is 1.2 billion tons, mostly blast oxygen furnaces (BOF), where you can mix in a bit of scrap as additional feed and doing so save some alloys, but the main feed is iron ore and coke.

About 15-20% of capacity (capacity is not output) is electric arc furnaces (EAF), which you absolutely need for using scrap as a feed.

The principal steel makers in China have both, BOF and EAF, and use in tandem, depending on cost of production of using either, which depends mostly on iron ore, coke, electricity and scrap prices.

At this time China restricts imports of scrap and the import of iron ore is +/- 1 billion tons, owing to Brazil's Vale problems, more than half of it from Australia.

Even if Australia was only 20% of imports, China could not do without it.

In the US and EU we use overwhelmingly EAF. That is the main reason, why our steel can't compete with China.