Blogs

Steel scrap contamination affecting steel recycling

  • Steel scrap uses and availability
  • Threat of contamination

 

Steel is one of the few alloys which is almost 95% recyclable. This ensures a long-life cycle for steel products in the global economy, which ranges from the first-time use of steel to multiple recycling rounds that obsolete steel scrap can go through. Steel has a long-life cycle backed by its physical properties, which enables it one of the highest recovery rates among all recycled metals/alloys globally. The largest sources of steel scrap are home (scrap generated in steel mills) and obsolete (end of life vehicles, demolished steel structures and machines) scrap.

The global steel scrap availability stood at ~750 million tonnes of usable scrap in 2017. Scrap is abundantly available in developed economies that have multiple ageing steel structures and a large inventory of end of life vehicles. The availability of steel scrap is the highest in North American Free Trade Agreement (NAFTA) countries, European Union and Japan, which makes these regions the largest global exporter of steel scrap. 

Steel scrap is utilised in both the major commercial methods of steel production such as Basic Oxygen Furnace (BOF) and Electric Arc Furnace (EAF).

EAF steel production: steel scrap forms the largest use in EAF steel production and it also forms ~90% of the total global EAF primary charge feed, acting as the primary source of iron for EAF steel production. This makes EAF steel producers the largest consumers of steel scrap globally.

BOF steel production: steel scrap forms a part of the feed mix in BOF steel production along with hot metal and forms ~10-15% of the BOF feed mix, mainly serving as a controller of reactions in a furnace.

Steel scrap plays an important role in the global steel production input feed and serves a critical role in steel production in countries that are large-scale producers of EAF steel. 

The global steel scrap trade entails export volumes of around 100 million tonnes annually, which shows a vital role played by it in the global steel industry. The trade largely takes place in order to facilitate steel mill operations in countries that are experiencing scrap shortages like India, Turkey and the Middle East, these are large regional producers of steel through the EAF route.

According to the industry estimates, the steel scrap availability in the next decade is expected to be sufficient and no serious shortages are expected on a global scale up to 2030. The availability is projected to rise over the long-term on the back of scrapping of end of life vehicles in China and ageing steel structures in the developed economies. Televisory expect that the strong growth in the EAF steel production would lead to a rise in its share in the total steel production globally from the levels of 28% in 2017 to more than 35% by 2030. This is set to boost the consumption of steel scrap over the long-term, which will boost the importance of steel scrap as a commodity around the world.

Contamination risk for steel scrap

Nevertheless, usage of scrap also has its limitations. When compared to pure and fresh steel manufacturing, steel manufacturing from scrap leads to variations in its quality due to the presence of other metals in the input. These metals cannot be completely extracted during the melting process and influence the final quality of the steel produced. Copper is the metal which has the most pervasive effect on the steel production, while other metals usually find a small presence in the scrap inventory. The presence of copper in steel scrap beyond a minor percentage of weight creates problems in the processing of the final alloy. Copper concentration can lead to the cracking of steel surface during the hot rolling process. The largest source of copper contamination for steel production globally is mainly from utilisation of obsolete scrap from end of life vehicles, mechanical and electrical goods, which contains copper primarily in the form of wiring.

The steel recycled from scrap, which contains copper lead to a production of low-grade steel, which is used to produce basic steel products like bars and rods. These are utilised in the construction and infrastructure sector as the demand from these sectors can accommodate a low-quality of steel. Further, high-quality steel products like flats, plates and coils require high-quality feed inputs as raw material, for instance, iron ore for the BOF route or steel scrap with very low levels of copper concentration for the EAF route. The demand for low-quality steel products is currently the highest in countries where the infrastructure and construction sectors are growing rapidly. This primarily puts emerging and frontier economies as the highest demand sources for these grades of steel. A high-quality steel is used to manufacture durable goods and capital goods, which distributes its demand globally, generally, based on the dynamics of consumption and economic growth in a country.

Raw material feed to finished steel cycle

The present global steel scrap market operates with a large-scale global trade ranging from input feed raw material to finished end product steel. The countries with an abundance of obsolete scrap (mainly the developed economies) are exporting to countries with a shortage to help fulfil the operation of EAF capacities globally. Furthermore, developed economies like the USA also have a large EAF steel manufacturing base, which makes their domestic scrap demand sizeable. Steel demand in these economies largely consists of high-quality steel products due to a strong demand for mobility, capital goods and durables, which exceed the domestic demand for infrastructure and construction. Thus, they require the use of high-quality (low copper concentration) scrap to control the risk of copper contamination to produce higher grades of steel. Thus, scrap exports from developed markets on an average have a notable copper presence, which are sent to developing economies as it can be readily utilised to manufacture steel for use in their growing infrastructure sector.

Copper’s presence in steel scrap can to a certain extent be dealt with the using of methods that primarily involve magnetic separation, manual disassembly and hand-picking which are costly, labour-intensive and do not have a 100% efficiency of reducing copper concentration in a scrap. Mechanised separation and chemical solutions (which are more effective) are still in the testing phase and would require huge efforts to scale-up. Thus, copper concentration from scrap sources is presently accommodated by using the steel to meet the infrastructure demand globally.

However, the current strong growth in the EAF steel production globally should usher in a large rise in scrap demand going forward. The BOF route of steel production has a high environmental impact and Televisory does not expect large growth in the steel production through this route in the long-term. These two causes could result in an increasing concentration of copper in the steel production, which may result in a large production of low grades of steel.

If scrap availability were to be low than the estimated in the long-term, the problem created by the presence of copper in steel scrap will aggravate further as copper separation methods are incapable of effectively dealing with the problem at hand. This is expected to result in a growing availability of steel for infrastructure and construction purposes, which can be accommodated by the global demand up to the point strong infrastructure growth is posted by developing economies. However, a saturation in infrastructure demand in the long-term can structurally change the demand for different grades of steel. Considering the strong expected growth in EAF steel production and stagnation in BOF steel production, a rising copper concentration in the global steel production can impact the availability of high-quality steel going forward.

Televisory believe that significant efforts to reduce copper presence in steel scrap is need of the hour as the future steel demand looks more inclined towards consumption for high-quality steel as equated to lower grades of steel. In order to match the demand, EAF steel mills would have to develop better practices for management of high copper concentration scrap within the furnace or look for improved technologies for copper separation from steel scrap like by mechanised and chemical separation process which is yet to attain economies of scale, hence, these are not cost-efficient in the current context. 

Your Rating

Slack set out to kill E-mail

Started as a side project for internal use in a gaming company High revenue growth with recurring revenues Went Public by offering shares through the Direct Public Offering ...

Will the Big Bang merger drive, of Indian Public Sector banks, provide the required impetus to the slowing economy?

India’s Government announces plans to merge 10 of the country’s public sector banks Probable impact of the mergers   India’s Finance Minister, Nirmala Sitharaman,...

Is Mothercare on the verge of collapse?

History of Mothercare What went wrong? Company moved into administration   Mothercare, an iconic brand for babies, children and parents to be, went into...

Rapidly growing Indian online food delivery industry and its unrealised profits

Evolution of online food delivery industry in India Geographical penetration and scope for expansion Key players and their zeal to balance revenue and costs   Online...

Tire manufacturing industry, analysing the cost and margin trends

The global market for tire manufacturing stands at $180 billion. Michelin anticipates the long-term demand to rise at the rate of 5 to 10% a year in developing markets and 1 to 2% a year in mature...

An analysis of Malaysian rubber glove industry

How big is the international rubber gloves market? Reasons behind the healthy and steady growth Malaysia’s role in the industry Why are companies struggling for stable...

Failure of Amazon in China, an analysis

E-commerce market in China Online consumer product retailers in China Performance of Amazon in China   Amazon is a global e-commerce player selling a wide...

Can lithium-ion anode demand for needle coke reduce availability for electrode players?

What is needle coke? Uses of needle coke Lithium-ion battery manufacturers demand needle coke   Needle coke? Needle coke is a specialised form of petroleum coke...

Is the radio broadcasting industry in the U.S. dying? An analysis

Radio, the most powerful medium of reach in the U.S. Why the industry is moving at a slow pace? Radio’s health is still sound, will it continue in the long-term?   ...

Carbon black industry, strong potential for supernormal profitability?

What is carbon black? Its uses Impact of the environmental curbs in China   What is carbon black? Carbon black is a fine carbon powder and it is a disorderly...

Indian wood panel industry, growth drivers and present trends

Current market scenario in the Indian plywood industry Growth in the housing sector and rapid urbanisation to provide the boost GST rationalization to reduce price difference...

Housing finance market in India. Is affordable housing driving the growth?

Overview of the housing finance sector in India Key players dominating the segment and their dynamics Factors driving aggressive demand for housing   The housing...

Rice industry outlook 2018

Major rice producers and consumers Global rice trade Factors dominating the trade   Rice is the 3 rd largest produced agricultural commodity in the world, after...

Sri Lankan economic and political crisis

Sri Lanka’s latest political crisis, who governs the nation? Poor economic indicators adding to the nation’s woes   Sri Lanka is currently embroiled in a political crisis,...

Blockchain, an emerging concept, a disruptive technology (Part 1)

What is blockchain? How is blockchain revolutionary? Cryptocurrency, the new money ICOs, the new way of raising money Summary Blockchain is a software architecture...

Malaysian rubber glove industry, an update

Rising global demand for gloves Impact of USP 800’s implementation and the US-China trade war on Malaysia’s rubber gloves industry Key challenges for the Malaysian rubber...

Rise of Ant Financial, will the success story continue?

What is Ant Financial? Journey to become king of unicorn Will regulatory curbs hinder its success journey?    Ant Financial, an affiliate and integral part...

Battle for the textile and apparel industry in Southeast Asia

The reasons for China’s decreasing presence in the industry Initiatives by the governments in Southeast Asia to boost the textile trade Vietnam and Bangladesh’s quest to conquer...

Unnoticed growth of the media and entertainment industry in India

Overall industry brief Growth of the M&E industry and its segments Major supporting elements of this growth   Media and Entertainment (M&E) is a very wide industry...

Education industry in India, an overview

Growth of private universities in the nation Future potential of the education industry in India   The education sector in India is estimated to be worth USD 91.7 billion...