Scrap steel study updated

Tendencies outlined five years ago in a study on scrap and the steel industry have materialized at a faster rate than expected, says the International Iron and Steel Institute.

The institute recently published an updated and revised version, titled Scrap and the Steel Industry: Trends and Prospects for Solid Metallics, of its 1982-83 study.

The latest study re-examines the scrap classification systems, structure of the scrap industry, sources of ferrous scrap, quality aspects of scrap, impact of technological changes on scrap supply and demand, direct reduction, international trade in solid metallics, price trends and the future supply and demand of solid metallics.

On the scrap demand side, says the new study, the rise in the share of purchased scrap has accelerated because continuous casting and other improvements in rolling and finishing have improved yield rates and, therefore, have reduced the amount of circulating scrap.

However, although the advance of electric arc furnaces was rapid, their increasing scrap demand was more than offset by the phasing out of open-hearths. The over-all result of these trends and of the stagnation or fall in crude steel output of the industrialized countries was a decrea se of scrap usage, according to the latest data. More contaminants

On the scrap supply side, the expected increase in the level of contaminants has occurred even more rapidly than was feared five years ago: the increase in the share of alloy, and particularly of coated steels in past and present steel consumption, was fast. This development has called for expensive improvement of scrap management and upgrading techniques by both scrap and steel industries, the study maintains.

The volume of international trade in scrap and pig iron has risen more rapidly than expected, attaining record levels. However, despite growing demand directed onto the market for domestically and internationally purchased scrap and other-solid metallics, prices have risen only moderately, as the overall availability of the main input, hot metal, has continued to exceed actual needs, according to reported figures.

While there is an adequate supply of scrap and other solid metallics to 1990, “integrated steelmakers are actively looking at ways of increasing the scrap charge to the oxygen furnaces, while the success of the scrap-based mini-mills in the U.S. and elsewhere will stimulate others to follow their lead,” the study says.

“It cannot be excluded, therefore, the easy availability and relatively low price of scrap of recent years could change as steelmakers seek to optimize their raw materials inputs.”