The UK generates sufficient ferrous scrap to meet increased future demand driven by the domestic industry’s transition to electric arc furnace steelmaking. Scrap export restrictions would have a “catastrophic negative” impact on prices and jeopardise scrap merchants’ business continuity, says the British Metals Recycling Association (BMRA).
Citing a recent UK Steel report, BMRA points out the UK steel industry will need between 4.2mt and 7mt of scrap annually by 2050, compared to 2.5m t/year today. The country currently produces 10.6m t/y of scrap.
“The UK is not stripping itself of a resource through exports but simply maximising its collection and recycling levels. Any restrictions could lead to recycling levels being compromised,” the association says in a note seen by Kallanish.
“Metal recyclers in the UK only export because the domestic market is not large enough. As domestic demand grows, metal recyclers will comfortably meet this demand; as long as the economics are there,” it adds.
Referring to the UK Steel report’s assertion that exports should be governed around “better environmental regulations”, BMRA says under current regulations, waste can only be shipped to countries that operate to equivalent standards as those found in the UK and EU.
“It is also surprising that UK Steel raises both environmental and social concerns about export markets, yet the UK is content to import from said countries,” BMRA continues. “This is why any standards regarding sustainability must be applied across the whole supply chain.”
“There is also an assumption that exporting what it terms ‘lower quality scrap’ means that non-ferrous metals within that load are not recovered. This is perplexing as no matter where they operate, steel mills do not want large residual volumes in the mix. Even if these non-ferrous metals were recovered in the UK, much of these arisings would still be exported due to a lack of processors/foundries in the UK,” the association notes.
“The UK Steel industry must recognise that scrap steel is a globally traded commodity with a price set on the international stage. The delivered quality of scrap is linked to the demands from the purchaser, be they domestic or overseas. Metal recycling companies would be willing to make investment in further innovation if it was clear the UK steel industry was willing to pay for these improved grades,” BMRA concludes.
Adam Smith Poland