Increasing use of recycled steel spurs growth in the global steel scrap market, says report

Global Industry Analysts Inc. (GIA), San Jose, Calif., has released “Steel Scrap: A Global Strategic Business Report.” The global market for steel scrap is projected to reach 793 million metric tons by 2020, driven by the growing demand for steel and increasing shift toward the use of electric arc furnaces (EAF) in the manufacture of steel. The process employs the use of scrap metal instead of coal to produce steel.

Also driving growth is the importance being placed by emerging economies such as India and China on increasing recycled metal scrap consumption to reduce carbon footprint. Global warming is one of the most important issues currently faced by the global steel industry. Recycling of scrap significantly reduces CO2 emissions, resulting in rising use of recycled steel in the manufacturing of goods, thus driving demand for steel scrap.

An increase in automobile production also is expected to spur demand for steel and recycled steel scrap. Also, the rapid increase in the number of end-of-life vehicles in countries such as China is expected to help expand scrap volumes. Since scrap metal is traded globally, economic conditions tend to influence demand patterns and pricing trends significantly.

Steel scrap imports to the Middle East registered relatively steady growth in recent years, led by an expanding steel production base in countries such as Saudi Arabia, Kuwait, and Qatar. Further, the imposed ban on nickel ore exports from Indonesia to China in 2014 is expected to drive the demand for steel scrap in the country, as it turns to scrap usage in steel production. As the report states, Asia-Pacific represents the largest and the fastest-growing market worldwide. The growth in the region is led by the healthy pace of urbanization and industrialization in developing countries and accelerating shift toward the EAF method for steel production.

The report analyzes the global steel scrap market, including key market trends, recent product launches, and strategic corporate initiatives of key market participants. The report also provides market estimates and projections in million tons across all major geographic markets, including the U.S., Canada, Europe, Asia-Pacific, Middle East, and Latin America.