The market for scrap steel is weakening, but the circular economy may offer a ray of hope. A new study claims that old steel products will become increasingly important to the industry. EURACTIV Germany reports.
The steel recycling industry continues to come under pressure, firstly because of China’s dumping practices and secondly because of the drop in iron ore price, which lets new steel be made more cheaply, according to the Federation of German Steel Recycling and Waste Management Companies (BDSV).
In 2015, the price of certain types of scrap fell by up to 40%, making it unattractive financially. As a result, demand decreased by 7.5%.
Europe-wide, it looks bleak for the industry: In eight years, the use of scrap has fallen by nearly a quarter to 90 million tonnes. In the past, Europe could count on Turkey to deal with, but in 2015 it bought 20% less scrap than it did in 2014.
But there is a glimmer of hope on the horizon. A study produced by the Fraunhofer Research Institute UMSICHT reveals that the steel recycling sector will become increasingly important to the steel industry’s value chain.
The current and future raw material requirements of the German steel industry will not be met just by primary materials, explain the researchers. “Companies involved with steel recycling collect and process secondary raw materials so that they can be reused by steel producers,” said UMSICHT’s Markus Hiebel.
He added that scrap is an “indispensable secondary raw material for highly innovative steel products, both nationally and internationally.”
That should make things easier for the steel recycling industry, which in Germany alone accounts for billions in turnover and in 2015, according to BDSV data, employed 37,000 people.
The study was also certain that steel recycling will play a increasingly important role in the future development of the circular economy, thereby contributing to climate protection. Products made in Germany from scrap steel are significantly greener than those produced from primary materials abroad.
As a result, less primary materials and steel, sometimes produced under questionable conditions, would be imported into Germany.
Using scrap also helps reduce CO2 emissions. the study showed that producing 12.6 million tonnes of crude steel using scrap saved about 17 million tonnes of CO2 a year in Germany, compared to producing crude from primary materials.
Scrap can continue to be used in the steel and stainless steel production sectors, for construction, car building, energy technology and aerospace engineering, without a loss of quality.
The study concluded that using scrap more will not only have a positive environmental impact, but will also give the German steel industry a much needed shot in the arm when it comes to competing with its Asian counterparts.