Steel scrap industry to rebound after recession

Archiv – Global | Recycling of ferrous metal was significantly affected by the global meltdown, but has now shown signs of picking up. A Global Industry Analysts (GIA) Inc report shows that steel scrap consumption is set to rise to 631.5 mn tonnes by 2015.Global | Recycling of ferrous metal was significantly affected by the global meltdown, but has now shown signs of picking up. A Global Industry Analysts (GIA) Inc report shows that steel scrap consumption is set to rise to 631.5 mn tonnes by 2015.
The increasing use of steel scrap in steel making is largely attributed to its ability to be repeatedly used as a secondary raw material without loss of quality.
Improving sales in the automobile industry and enhanced construction activity, the hardest hit segments due to recession, are expected to fuel demand for scrap steel. Steel scrap’s favorable impact on the environment is also expected to boost the consumption levels in steel making industry, GIA report added.
Scrap steel industry has been significantly affected by the global economic meltdown, which led to a steep decline in the global supply of scrap steel. Due to the economic slowdown, consumers across the world delayed purchasing decisions related to new cars and home renovation.
Asia-Pacific and Europe accounts for more than 70% of the global steel scrap consumption, as stated by the new market research report on steel scrap. As majority of the scrap steel is used in the production of new steel, trends and developments in the steel industry significantly influence the demand scenario in the steel scrap industry. The anticipated recovery of the global economy is also expected to favor increased demand for steel scrap. Rising demand for raw materials used in steel making industry from rapidly expanding emerging markets such as China, India and Brazil is expected to fuel demand for steel scrap. Establishment and operational commencement of new steel mills using electric arc furnace technology is also expected to fuel demand for steel scrap.
A major challenge facing the steel scrap market is the imposition of restrictions on export of steel scrap by several countries, which is expected to adversely affect countries that rely exclusively on imports for meeting domestic requirements. Such restrictions generally take the form of export prohibitions, taxes, administrative measures, and export quotas.
More than 55% of steel produced in the European Union employs steel scrap as the raw material. The European steel industry is witnessing lower volumes of steel production, lower scrap consumption, lower levels of new scrap arisings. European companies using electric arc furnace technology, which uses steel scrap as the primary raw material for the manufacture of steel, accounted for over 40% of all steel production.
China leads the world market in the production of steel. However, the country consumes a relatively smaller proportion of scrap steel for steel production. Robust domestic demand along with strong economic development has been the driving force behind the growth in Chinese steel industry. However, the sector witnessed turbulent times in 2008 and 2009 with steep decline in external consumption leading to decrease in Chinese export of steel. The adverse economic conditions and the subsequent decline in steel demand led to cuts in the production at several domestic steel mills resulting in substantial decline in the steel output, which is also evident in the decreased consumption of steel scrap.