Investments in green steel production, which will increase DRI-EAF capacities at European mills, are expected to generate an additional 15mn-19mn t of scrap consumption, consulting firm Arthur D Little said this week at an industry event in Istanbul.
These new capacities are expected to reduce the availability of high-grade scrap and increase prices, the consulting firm noted.
New scrap, generated from manufacturing, in Europe is estimated to be in shortage of 9mn-14mn t by 2030, assuming all DRI capacity is used. But this could be partially offset through the use of old scrap, generated from sources such as demolition, which is not expected to be in shortage, Arthur D Little said.
Furthermore, in the case of higher scrap prices, improved collection could make an additional 10mn-15mn t of demolition scrap available.
Every steel player is looking at scrap as it is the easiest way to decarbonise so it is a race to secure scrap supply, the consulting firm said.
In the past couple of years, steel producers such as ArcelorMittal, Salzgitter and Gerdau, among others, have all acquired scrap recycling companies. The company noted that Turkey's reliance on European and US scrap has increased over the past four years owing to reduced trade with Russia.
"Moving forward, Turkey should diversify its trade routes and increase trade volume with Africa and the Middle East as scrap demand rises with stricter global environmental regulations, European steelmakers pushing the EU to restrict scrap exports being an example of this," Arthur D Little said.
Last year, the European Parliament voted to approve a proposal for the revision of its waste shipment regulation that imposed controls on its exports of scrap metal to non-OECD countries.
