As the “green” steel transformation is about to play an increasingly important role in the overall move towards carbon neutrality, the importance of scrap will increase across the whole steel industry. So said delegates at the Kallanish Flat Steel 2021 virtual conference held on Tuesday.
“Green steel is going to be the most important issue for the steel industry in the future,” said Colakoglu Metalurji chief executive Ugur Dalbeler. “Certain areas will have better positions. In my opinion, it is the US and the second one is the European Union.”
The trend will also be driven by industries including construction and automotive as they all have plans for reducing carbon footprints, according to Dick Sands, managing director distribution of Stemcor.
Dalbeler believes scrap will be more and more important and will see higher prices. Sands agreed with the view, saying decarbonisation will increase demand for scrap and keep prices high. As for China, Dalbeler thinks the country will consume all the scrap it generates, rejecting the speculation that China might become a net exporter of steel scrap.
Another issue the industry is facing already is energy cost, and this will continue as green steel brings the need for clean energy. High energy and raw material costs will result in high steel prices, and a higher “new normal” price level. “From now on, we will see steel prices be at least $700-800/tonne and it might even be higher,” Ugur commented.
Trade measures, however, will force global supply chains to become increasingly regional, he added. This creates a risk for Turkish scrap procurement from Europe (see separate article).
By Kallanish Team