Published on Nov 11, 2024
The global landscape for steel scrap is poised for significant transformation, as highlighted at the 2025 China Metal New Materials and Circular Economy conference during the Ecomondo 2024 international fair in Rimini, Italy. Analysts predict a decrease in China’s steel scrap consumption by 3% in 2024, marking a notable shift in the industry’s dynamics. As the steel market adapts to evolving economic and geopolitical conditions, the role of scrap in the global scenario of recycled raw materials becomes increasingly pivotal.
Changing Market Dynamics:
Over the past two decades, the Western world’s integration with Chinese and former USSR markets has driven a surge in commodities demand and heightened price volatility. Stefano Ferrari, Chief Research Officer at Spiderweb, emphasized these points at the conference. However, the current scenario is being reshaped by new factors such as geopolitical tensions, progressive market closures worldwide, and rapid technological advancements. These elements significantly impact consumer needs and supply and demand trends, not only for raw materials but also for human capital.
Future of Scrap Demand:
During the conference, consensus emerged that the demand for scrap will grow over the next 15 years. This growth is attributed to two main factors: the expected rise in steel production and the gradual shift to electric arc furnace (EAF) based steel production in China and Europe. EAF technology is known for its efficiency and lower environmental impact than traditional blast furnace methods, making it a favorable option for sustainable steel production.
Challenges in Scrap Collection:
One of the key challenges highlighted is the increasing difficulty in scrap collection, particularly for old scrap. As the demand for scrap rises, so does the complexity of collecting and processing these materials. The Boston Consulting Group predicts a 3.3% increase in scrap demand from 2021 to 2030. The European Union, currently holding a 15 million metric tons surplus, could see this surplus shrink to 10 million metric tons in the coming years.
Adaptation in the Industry:
The industry must adapt to these evolving conditions. Steelmakers and scrap traders must refine their scrap collection and processing methods. Steel producers may verticalize their scrap collection and selection processes, ensuring greater control and efficiency. On the other hand, scrap traders can enhance their selection and purification processes to meet the growing demand and quality standards.
Quality and Technology Integration:
Cinzia Vezzosi, President of Assofermet, highlighted the importance of old scrap in decarbonization. Despite its longer transformation period and lower quality than new scrap, old scrap remains crucial for sustainable steel production. Countries like Turkey and the United States already incorporate old scrap into their production processes.
Advanced purification technologies, often supported by artificial intelligence (AI), are expected to significantly enhance the quality of old scrap. Vezzosi emphasized the potential of AI as a tool for European companies to catch up with their counterparts in China, the US, and the Middle East.
Conclusion:
As the steel and scrap markets navigate through these changes, it is clear that scrap will play an increasingly central role in the global scenario of recycled raw materials. The industry must embrace technological advancements and adapt to new market dynamics to meet the rising demand and contribute to a sustainable future. The insights from Ecomondo 2024 underscore the importance of strategic adaptation and innovation in driving the future of the steel and scrap markets.
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