NEWS

2021.11.24
Asia
Scrap trade to benefit from battle against carbon emissions

Global efforts to reduce carbon emissions will create a significant opportunity to grow scrap’s share of current steelmaking raw materials beyond its current average of 30%, according to leading experts on the global ferrous market.

Steven Vercammen, senior knowledge expert at management consulting firm McKinsey, identifies two key challenges: to extract more scrap from the system and to enhance quality. Having traditionally followed iron ore and coking coal trends, scrap prices are likely to ’disconnect’ as a result of ‘this whole decarbonisation pressure and the importance of using more scrap to be able to reduce CO2 emissions’, he believes.

Vercammen set out this bright future in a presentation entitled ‘Decarbonisation of the steel industry and its impact on the steel recycling sector’ during the BIR ferrous division’s latest webinar. One factor, he said, was China’s increasing consumption of steel scrap which he believed could double by 2050 from its current 240 million tonnes. Prices of value-added scrap will increase, agreed Benedikt Zeumer, a partner at McKinsey. ‘Recycled materials will be much more favourable in terms of CO2 emissions and probably also energy intensity,’ he argued.

‘China is moving in the direction of use of higher percentages of scrap and is reducing the percentage of steel made from iron ore,’ agreed fellow panellist Scott Newell, chairman of Newell Recycling Equipment in the USA and vice chairman of China Recycling Newell Equipment. ‘A few years ago, there was concern that China might become a huge scrap exporting country, with the effect that it would hurt scrap prices around the world. The opposite is what is happening. China will need to import scrap rather than iron ore and coal in order to reach the goals of a cleaner environment and more cost-effective steel production.’

China, Turkey see rise in steel scrap use
Around 630 million tonnes of steel scrap are recycled worldwide every year, preventing nearly 950 million tonnes of CO2 emissions and making ‘a decisive contribution to climate protection’, BIR’s statistics advisor Rolf Willeke confirmed in his update of the latest steel recycling numbers. Adding in scrap usage within the foundry sector, annual CO2 emission savings amounted to over one billion tonnes. He highlighted a 47.1% surge in China’s steel scrap consumption to 137.95 million tonnes in the first six months of 2021, reflecting the objective announced in China’s latest Five-Year Plan to reduce CO2 emissions in crude steel production through increased steel scrap usage.

In the January-June 2021 period, the 33.2% year-on-year increase in Turkey’s overseas steel scrap purchases to 12.872 million tonnes confirmed the country’s standing as ‘the world’s foremost steel scrap importer’, said Willeke. The EU remained the world’s top steel scrap exporter, growing its shipments by 49.3% to 11.241 million tonnes.

Scrap trade to benefit from battle against carbon emissions