Energy transition to invert scrap trade flow: conference

The transition of the steel industry towards low-carbon technologies will be accompanied by fierce competition for scrap, warned speakers at Thursday’s Green Day conference organised by German distributors federation BDS in Düsseldorf.

All German oxygen-route mills are heading for a switch to the direct reduced iron route in the course of this decade – ArcelorMittal, Salzgitter and Dillinger/Saarstahl presented their cases at the conference. However, there will be a transitory period marked by enhanced use of scrap in blast furnaces, to lower the share of coal, until DRI technology is ready to go. Participants pondered if the higher demand for scrap in Germany and other EU countries will boost scrap prices, plus mean a notable limitation on scrap exports.

It will, replied Karl-Ulrich Köhler, chief executive of Stahl-Holding Saar SHS (Dillinger/Saarstahl). “This will become a hot topic, initially for pricing, and the trade flow of scrap could be virtually inverted. Looking ahead, I see Germany as an importer, rather than an exporter,” he predicted. So, at least for the transitory period, “there are heavy storms brewing, and you do not need to be a weather prophet to foresee it,” Kallanish heard Köhler say.

He also spoke of recent moves by electric arc furnace-route operators to seek alliances with the future DRI mills. Some EAF mills “have come forward to suggest establishing joint production sites” to prevent the factions from vying for scrap as opponents.

ArcelorMittal Germany representative Arne Langner pointed at the group’s visible strategic measures that foreshadow its growing hunger for scrap. Last year, ArcelorMittal acquired scrap merchant companies in several European countries.

Christian Koehl Germany