US prime scrap is expected to be in short supply in the future as new manufacturing investments fail to keep pace with demand, the chief executive of Cleveland-Cliffs said at a conference today.
A resurgence in manufacturing investments in the US over the last few years presents an opportunity for more prime scrap generation to feed electric arc furnace (EAF) steelmakers, chief executive Lourenco Goncalves said at the Global Steel Dynamics Forum in New York.
But with the ratio of domestic steelmaking tilted heavily towards EAF operations — a trend which is widely expected to continue — prime scrap supply looks set to remain tight in the future.
"We are probably a little too much in the EAF versus the blast furnaces in the US," Goncalves said. "There is no other developed country .. that has a 70pc EAFs and less than 30pc blast furnace participation … not in Japan, not in Germany, not in France, not in Brazil. Nowhere."
Production of direct reduced iron (DRI) and hot briquetted iron (HBI) metallics are the solution to producing higher-quality steel and lowering the copper content in scrap-based EAFs, Goncalves added.
"We are not planning to produce DRI or HBI to sell into the market, so other companies will have to figure out [where to source their metallics]," Goncalves said.
