Developments in Scrap

Scrap Industry is going through a structural change...some positive and some negative.

Negative is of course the strict norms in China on contaminated scrap which is having a cascading effect across the globe especially in developed world where cities are reassessing the scrap recycling systems they had built. Scrap yards are feeling the brunt as they need to quickly find new markets. India, Vietnam, Thailand are buying but not at the levels of China. The China effect is more on non-ferrous scrap, plastic, and other scrap. Countries like India are also likely to follow suit like China post the general elections with stricter norms and sorted and cleaned scrap rather than being a dumping ground for sorting because of cheap labour.
Scrap industry is also undergoing structural change in China as China goes through the second stage of development which one can call Version 2 wherein there is sufficient scrap available domestically from the Version 1 stage of development. So China is becoming less dependent on imported scrap.
Coming to Steel Scrap. Turkey is back in the market after the economic upheaval of end last year. But we foresee changes in the steel scrap market as well with regards to availability from United States.

United States is the new kid on the block on steel making. And leapfrogging with both technology and innovation.

Thanks to the tariffs in United States on import of steel, there has been a dramatic increase in steel production, and announcement of new mills and mouth balled capacities coming back on line. We believe the new production will be in setting up Electric Arc furnace based new mini mills as announced by Nucor and Steel Dynamics. These mini mills have low economies of scale that allow agility. Also there has been advancement in steel making technology in the Electric Furnace which allows high grades of automobile steel to be made. Most importantly, there is enhanced awareness for environmental sustenance and there is low carbon emission in Electric Arc based steel production compared to production of steel through the Iron Ore Blast furnace route.
We see an increased movement to EAF ( Electric Arc Furnace) mills in the developed world especially in the United States and away from Iron Ore route unless there is innovation that allows Electrolysis of Iron (from Iron Ore) without the emission of CO2 when combined with coal steel making.
Since steel scrap is the primary raw material input in Electric Arc furnaces, we believe steel scrap in United States will reduce for international trade and will stay within the borders.
Overall, there will be need for increased efficiency at scrapyard level and in the logistics and across supply chain. Technology and visibility has already come into the trade. For sorting of scrap, don`t be surprised if Robots start making inroads in scrap yards at least in the developed world.

SCRAP LIBRARY

Thanks to the tariffs in United States on import of steel, there has been a dramatic increase in steel production, and announcement of new mills and mouth balled capacities coming back on line. We believe the new production will be in setting up Electric Arc furnace based new mini mills as announced by Nucor and Steel Dynamics. These mini mills have low economies of scale that allow agility. Also there has been advancement in steel making technology in the Electric Furnace which allows high grades of automobile steel to be made. Most importantly, there is enhanced awareness for environmental sustenance and there is low carbon emission in Electric Arc based steel production compared to production of steel through the Iron Ore Blast furnace route.

To buy or sell ferrous scrap, non-ferrous scrap or recycling equipment, please contact us.

 “With the new day comes New strength and new thoughts” – Eleanor Roosevelt

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