The future of global scrap availability

Our estimates suggest that global ferrous scrap availability stood at about 750 Mt in 2017, 630 Mt of which was recycled by the global steel and foundry casting industries. We expect that global scrap availability will reach about 1 billion tonnes in 2030 and 1.3 billion tonnes in 2050. In other words, we expect to see a growth of more than 500 Mt in one of our main steelmaking materials in the next 30 years. 

Who will be leading this growth?

Developing countries, and particularly China, are expected to show the strongest growth in their scrap availability, reflecting the astonishing increase seen in their steel use in the 1990’s and 2000’s. China’s scrap availability is estimated to reach roughly 300 Mt by 2030 and 400 Mt by 2050, from about 200 Mt today. 

Currently, China has a relatively low share of electric arc furnaces (EAF) and uses relatively less scrap than developed regions both in EAF and basic oxygen furnace (BOF) steelmaking but this could be set to change with the increasing availability of scrap. 

We are already seeing some important changes in the country’s steelmaking structure with the closure of about 140 Mt of induction furnace capacity and the application of new environmental measures curbing production. New EAF plants (approx. 50 Mt) are also expected to be commissioned over the next 5 years.

In other developing regions, such as India and the ASEAN, continued strong growth in steel production and use will also contribute to the growth in scrap availability. India and the ASEAN region are expected to see their scrap availability double in the next 15 years.

And what about the rest of the world?

Scrap availability in the rest of the world is also expected to grow albeit at a much slower rate than in the developing parts of the world. We estimate that the scrap availability in the regional grouping of NAFTA, EU, and Japan, a proxy grouping for the developed world, currently stands around 320 Mt and expected to reach about 350 Mt by 2030.

What does all this mean?

The strong growth in scrap availability suggests that in the medium and long-term we can expect the steel industry to increasingly replace natural resources by steel scrap, thereby conserving raw materials, energy, and reducing CO2 emissions.