I recently gave a speech at the 5th International Steel Industry & Sector Relations Conference in Istanbul, Turkey where I provided an outlook on the global steel industry. Part of my speech focused on the growing global ferrous scrap availability and the innovative steelmaking technologies which are potential game changers for the future of steelmaking.
In 2016 the steel industry used about 1.2 billion tonnes of blast furnace iron (hot metal), 520 million tonnes (Mt) of ferrous scrap and 75 Mt of direct reduced iron - to produce about 1.6 billion tonnes of crude steel globally.
Global ferrous scrap demand has stagnated in the last couple of years, and the share of ferrous scrap in the total metallics demand for steelmaking has declined. This is reflected in a reduced share of electric arc furnaces in the total global crude steel production, which today stands at around 25%. Electric arc furnaces use mainly ferrous scrap to produce steel.
Our estimates suggest that global scrap availability - the amount of ferrous scrap that can be collected and melted - stood at about 700 Mt in 2016. Global scrap availability is expected to reach about 1 billion tonnes by 2030, suggesting that the steel industry will be increasing its use of ferrous scrap considerably in the medium and long-term. The use of ferrous scrap in the steelmaking process is beneficial to the environment as it preserves the natural resources that would be used instead, reduces emissions and supports the circular economy.
The steel industry has already improved its environmental footprint considerably in the past 50 years. For example, worldsteel data show that from 1960 to 2015 global steel industry decreased its energy intensity, that is energy consumption per tonne of crude steel produced, by around 60%.
Nevertheless, as an energy intensive industry, which accounts for about 7.0% of total CO2 emissions globally, the steel industry is challenged to do more.
The industry is actively investing in innovative and breakthrough technologies that can have a dramatic impact on the steel industry’s environmental performance and its steelmaking materials demand. One potential breakthrough technology is the use of hydrogen to replace carbon in metallurgical processes, thereby directly avoiding CO2 emissions. This would have a substantial impact on the demand for metallurgical coal.
There are also initiatives that focus on process integration and thus eliminating some traditional parts of the steelmaking process, such as cokemaking and iron ore agglomeration. The use of such technologies at an industrial scale would also result in considerable savings both in energy and CO2 emissions, and would have a significant bearing on metallurgical coal and iron ore markets.
I would be very interested to hear your view on the impact of growing scrap availability and the technological developments in the steelmaking industry in the future.