Global ferrous scrap consumption rises 12% in 2021 as countries eye green goals
China’s scrap usage share highest globally Other nations too look proactively at EAF route India’s share to rise gradually as it focuses on mass-scale ste...
- China's scrap usage share highest globally
- Other nations too look proactively at EAF route
- India's share to rise gradually as it focuses on mass-scale steel production
- Scrap exports may become scarce as countries focus on domestic sales
Morning Brief: Global scrap consumption in steel-making (excluding foundries) increased by around 12% in 2021 to 620 million tonnes from 548 mnt in 2020, reveals SteelMint research.
It may be noted that 2020 was a year of flux as it saw the onset of Covid and thus crude steel production went up a mere 10 mnt and scrap usage dropped compared to 2019.
However, 2021 saw a resurgence in ferrous scrap usage as a feedstock. Data reveals that in 2021, the share of scrap in crude steel-making increased to 32% in 2021 from 30% in 2019, while it had dropped a tad to 29% in 2020.
In 2021, the total crude steel produced amounted to 1,951 million tonnes (mnt). In 2019, the share of ferrous scrap usage comprised 568 mnt in the entire quantum of 1,870 mnt of crude steel produced. In 2020, 548 mnt of scrap was used in producing 1,880 mnt of crude steel.
China used a lion's share of 245 mnt or almost 40% of the 620 mnt for making its 1,033 mnt of crude steel in 2021. Its share of scrap usage went up in 2021 by 24% compared to 21% in 2020 and 22% in 2019.
The EU produced 152.5 mnt of steel last calendar in which scrap consumption comprised 88.5 mnt. In 2020, in the 139 mnt of crude steel produced, scrap consumption was at 77.5 mnt and in 2019, the figures were at 111.40 mnt and 86.50 mnt respectively.
Many of the other key steelmakers also upped their EAF share.
Reasons for increase in ferrous scrap's share?
- China hogs lion's share: The maximum increase in ferrous scrap consumption in steel-making is happening in China, reveals SteelMint's data. The share has gone up to 24% in its 1,033 mnt of crude steel production in 2021 from 21% (1,065 mnt) in 2020 and 22% (1,001 mnt) in 2019.
Previously, the scrap share was at 10-12% but obviously China is making serious efforts to increase green steel-making in a bid to achieve its carbon neutrality goals. It has set targets of achieving 30% share of scrap feed by 2025, carbon peaking by 2025 and net zero by 2030.
- Countries focus on green goals: Decarbonisation is a major issue globally and all the other countries are also attempting to increase share of EAFs which use ferrous scrap as raw material. For instance, the EU, the second-largest steel manufacturing geography after China, has seen the share of scrap consumption going up steadily to 58% in 2021 from 56% in 2020 and 55% in 2019.
The US has always stressed on the electric route of steel manufacturing and its share has remained at an overwhelming 69-70% over 2019-2021.
- India's scrap usage to rise gradually: India is, however, an exception since its usage of scrap as a stockfeed will continue to remain range-bound for some time before it rises sharply, because it is a developing country and requires steel on a mass scale. As a result, several more blast furnaces are being set up. The current BF-BOF:EAF-EAF ratio of 45:55 will change to 55:45, going forward. This is not to say that India's scrap consumption is dropping. The share, compared to iron ore, has risen to 20% in 2021 from 18% in 2019. And this is set to rise too as the government is being proactive. The vehicle scrappage policy will encourage auto scrap generation while Tata Steel and M&M and others have entered the scrap generation space. More dismantling centres are coming up. Larger mills like AM/NS India, and JSPL are using the EAF route too while Tata Steel has also shown interest.
The CO2 per tonne of hot metal (thm) produced in India through the BF route is around 2.3 tonnes. Emissions through the EAF route in general is around 0.5-0.8 t per tonne of hot metal produced, taking into consideration the lifecycle emissions, noticeably lesser than the BF route's. For EAFs, the emissions also depend on the feed ratio of DRI and scrap.
The 32% share in 1,951 mnt of steel being made through the ferrous scrap usage route will increase as the world moves ahead with its decarb goals.
Scrap is not only emerging as a key steel-making raw material, it is also becoming a regional commodity. Going forward, most countries would focus on domestic consumption of the material and not be too keen on exports of the same.