Larger than Ever

Government bureaus and trade associations from throughout the world have reported and gathered data that points to at least 1.4 billion metric tons of crude steel having been made in 2010.

That total surpasses figures from 2007 and 2008 and is some 15 percent larger than the figure for 2009, when parts of the world were experiencing severe economic recession.

Economic development in East Asia, South Asia, the Middle East, Brazil and other parts of the world has pushed steelmaking activity to new heights, prompting ferrous scrap to trade at volumes and prices with little historic precedent.
 

BY THE NUMBERS
The Bureau of International Recycling (BIR), Brussels, has compiled a statistical portrayal of global steel production and the role of ferrous scrap in the steel industry.

The Ferrous Division of the BIR released the 2006 to 2010 version of its “World Steel Recycling in Figures” booklet at its 2011 World Recycling Congress in May in Singapore.

The BIR bills the booklet as an “important compilation of statistics on the global ferrous scrap markets.” BIR statistics advisor Rolf Willeke conducted research and authored the report, which includes a foreword from BIR Ferrous Division President Christian Rubach.

The figures for 2010 show that global scrap consumption by the steel industry amounted to about 530 million metric tons, an increase of some 15 percent compared with what was melted in 2009—a figure that matches the global increase in steel production.

The 1.41 billion metric tons of steel made in 2010 was larger than the previous high output year of 2007, when 1.34 billion tons of crude steel were produced.

China’s role in the steelmaking boom is clear, with Worldsteel Association figures cited by BIR showing China having these annual steel output figures:
•    2006 – 419 million metric tons;
•    2007 – 490 million metric tons;
•    2008 – 500 million metric tons;
•    2009 – 574 million metric tons; and
•    2010 – 627 million metric tons.

Among the surprises when comparing 2010 figures with those from 2009, Rubach said, was that China imported 57 percent less ferrous scrap in 2010 and that India’s imports dropped by nearly 25 percent.

Willeke predicted, though, that China’s scrutiny of industrial carbon emissions levels would prompt it to buy more ferrous scrap in 2011 and beyond.

Leading ferrous scrap exporters in 2010 were the United States (20.5 million metric tons), the European Union (18.9 million metric tons) and Japan (6.5 million metric tons).

The entire report can be accessed at http://www.bir.org/assets/Documents/publications/brochures/aFerrousReportFinal2006-2010.pdf.
 

STABLE CONDITION
Delegates attending the Ferrous Division Meeting at the 2011 BIR World Recycling Congress heard mostly positive things about the health of the steel and ferrous scrap industries.

Reporting from the European perspective at the late May event was Thomas Bird of Van Dalen U.K. Ltd., Stratford-Upon-Avon, England. He said the ferrous market in Europe has enjoyed “bullish sentiment” at times in the first half of 2011 but also has “stuttered somewhat” on occasion in reaction to world events.

Most recently, a “view of a weaker market in May did not materialize,” Bird commented. “Considerable volumes of tonnage were bought at the end of April and early May,” he added. “Prices for HMS (heavy melting steel) increased to the high $460s, and rebar levels for Turkish finished product were $710 at time of writing [this presentation].

“May saw healthy demand across the European Union, with [inventories] at mills running at relatively low levels,” Bird continued. “The market has taken a little bit of a breather in the last few days, but I do not believe this is anything but just that. Finished product demand remains healthy, and we are expecting demand for scrap to remain strong for the immediate future.”

Ikbal Nathani of the Nathani Group of Cos., Mumbai, reported that India’s crude steel production had grown from 60 million metric tons in 2009 to 67 million in 2010 to an estimated 75 million metric tons produced in 2011.

However, many Indian mills are producing or buying direct-reduced iron (DRI) to feed their furnaces, opting not to bid up scrap prices in a competitive global market. “India is blessed with natural raw materials and, thus, is not dependent on scrap,” Nathani said.

Also, India’s growing ship-breaking activity at facilities in Alang was “providing Indian consumers with superior quality HMS and rerolling scrap,” Nathani said. “There are around 100 vessels currently beached and being broken” in Alang, according to Nathani, who said ship-breaking was providing some 2.8 million tons of ferrous scrap to the Indian market each year.

Andrey Moiseenko of Ukrmet Ltd., Doneck, Ukraine, told delegates that Russia collected 21 million metric tons of ferrous scrap in 2010 while Ukraine collected more than 6 million metric tons.

Both government regulations and market conditions kept most of this scrap from being exported. New investments in electric arc furnace (EAF) steel mills in both nations has strained supplies. “Even one billet producer (in Ukraine) was stopped for a couple of weeks [because of supply constraints]; that has never happened before,” Moiseenko said. “Ukraine became a net scrap importer for one month in February of 2011,” he added.

Blake Kelley of Sims Group Global Trade Corp., New York, said scrap prices in North America declined in early May but were rebounding as the month ended.

On the demand side, Kelley noted that steel mills in the United States were running at about 73 percent of capacity, with flat-rolled steel in greater demand than long products. Scrap export flows also are healthy, Kelley reported. “China and Korea have been aggressively buying and consuming raw materials,” he told delegates. “China reportedly purchased many bulk cargoes with shredded pricing around $480 CIF (cost, insurance and freight); South Korea has also purchased many cargoes with heavy melting steel (HMS) prices flat in the mid-$470s CIF.”

Kelley noted that the world’s steelmakers were on pace to produce 1.54 billion metric tons of steel in 2011, a figure that is some 111 million metric tons greater than the 2010 output. “An increase of this magnitude in steel production, and its corresponding increase in raw materials consumption, has made for an interesting beginning to the year,” said Kelley, adding that the world’s steelmakers at this pace would consume some 48 million metric tons of additional scrap compared to 2010. “Seemingly, there is enough supply to cover that amount of demand. The 2011 BIR World Recycling Congress was May 23-25 at the Shangri-La Hotel in Singapore.