Asia – To produce steel in China, it is as cost-effective to make it from steel scrap as it is using blast oven furnaces, according to a Bloomberg report.
Scrap generation in China will double in the next decade, mainly because vehicles, machinery and domestic appliances will reach the end of their lives. In addition, much more construction scrap will become available.
For the year 2020, The China Association of Metal Scrap Utilization (CAMU) has set a goal of producing 20% of the country’s steel from scrap. As scrap generation increases, CAMU expects steel scrap prices to drop and thus favour steel production via electric arc furnaces.
‘The scrap wave is coming,’ comments Oliver Ramsbottom of McKinsey & Company. He notes: ‘There’s no doubt that the iron ore industry is going to be pretty challenged over the next decade at least because you’ve obviously got a lot of supply out there.’