Steel 7th Scrap - AMM · Turkish scrap imports dwarves the ROW and Turkish buying patterns have a...

Global Statistics Summarizing the Steel Scrap Industry and Market Drivers

This white paper has been created in conjunction with Metal Bulletin Research for American Metal Maket Events’ upcoming 7th Steel Scrap Conference being held on October 30-31 in Chicago, IL.

The data and trends examined in this paper and many others, will be addressed by expert speakers and panellists at the event.

Conference October 30-31, 2013Westin Michigan Avenue Hotel, Chicago, IL

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The global meeting point for the ferrous scrap industry

All data supplied by our official Research Partner:

W: www.amm.com/events/scrapE: [email protected] T: +1212 901 38282

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Turkish Steel Production

Global economic outlook

Scrap recovery trends

Scrap reservoir trends

Scrap quality discussion

Scrap quality discussion continued

Top 10 Scrap Exporters 2012

Top 10 Scrap Importers 2012

AMM Steel Scrap Conference

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US Crude Steel

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US crude steel production broadly mirrors the global pattern of stabilization without major recovery. The shale gas revolution and gradually increasing domestic demand means US crude steel producers are experiencing a more optimistic outlook than their European colleagues. The makeup of the US steel industry, with EAFs in the majority, makes them more adaptable to slackening and unpredictable demand than their European counterparts.

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Source: OECD Economic Outlook 93 database

Source: SRO April 2013

OECD growth projectsChange in real GDP, in per cent


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2011 2012 2013 2014United States 1.8 2.2 1.9 2.8Euro area 1.5 -0.5 -0.6 1.1Japan -0.6 2.0 1.6 1.4Total OECD 1.9 1.4 1.2 2.3

Predicted economic growth is relatively strong for the US - as shown by the below table - which bodes well for the US steel industry. A regional breakdown of global steel use also paints a picture of growth for the US and highlights Asia’s ever growing importance for global demand of steel and ultimately scrap as well.

Regional BreakdownMt

2012 2013 2014World 1 412.6 1 453.9 1 500.3NAFTA 131.2 135.0 139.0

United States 96.7 99.3 102.2European Union (27) 140.1 139.5 144.1Central & South America 46.9 49.8 52.0CIS 56.5 57.6 59.8MENA 63.2 65.2 69.9Turkey 28.5 30.6 31.9Asia 920.4 950 976.6

China 646.2 668.8 685.5Other Emerging Asia 60.0 63.6 66.7Developed Economies 389.0 390.5 399.6Emerging & Developing conomies excl. China 377.4 394.6 415.1

Apparent Steel Use, finished steel




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Scrap recovery map 2011

Scrap recovery map 2021

The below shows how global scrap recovery patterns are predicted to change over the next few years.




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0 - 18,75018,751 - 37,50037,501 - 75,00075,001 - 150,000150,001 - 300,000300,001 - 600,000

0 - 18,75018,751 - 37,50037,501 - 75,00075,001 - 150,000150,001 - 300,000300,001 - 600,000

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Scrap reservoir 2011

Interestingly the recovery trends do not mirror the reservoir trends, suggesting there will be increased competition in some areas and untapped reservoirs in others.

Scrap reservoir 2021




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US Crude Steel

0 - 46,87546,876 - 93,75093,751 - 187,50087,501 - 375,000375,001 - 750,000750,001 - 1,500,000

0 - 46,87546,876 - 93,75093,751 - 187,50087,501 - 375,000375,001 - 750,000750,001 - 1,500,000

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As the below figure shows, the US comfortably leads the steel scrap exporters statistics, with the EU and Japan the other major contributors to the export market. Russia and CIS countries are reducing their exports significantly, with domestic utilization rising, it is likely that Russia in particular will no longer be major steel scrap exporter.

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Turkish scrap imports dwarves the ROW and Turkish buying patterns have a significant effect on steel scrap prices. Relative to their market defining iron ore consumption and steel production, China is not a major scrap importer. Chinese crude steelmaking is still predominantly blast furnace based, reducing the demand for scrap, it is possible that as the Chinese steel industry develops it could become a steel scrap exporter.


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Turkey continues to lead the global statistics for imports of steel scrap, it is therefore not surprising to see the breakdown of crude steel production showing EAF steel production consistently contributing over 70% of crude steel production.

The below figure also highlights a continuing upward trend in crude steel production in Turkey.

Turkish Crude Steel Production – Total and EAFs

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Turkey Crude Steel Production (M tonnes) Turkey EAF Steel Production (M tonnes)

% of Crude Steel from EAFs

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Scrap quality highlight discussion preview with panellists Sachin Shivaram, Vice President of Commercial, Severstal North America and Dan Pflaum, CEO, Gamma Tech

At the upcoming Steel Scrap Conference Dan will present data that indicates the average copper level in shredded has risen from approximately 0.21% in 1980 to approximately 0.33% today. With the rise of EAF-based steelmaking, residuals are not being diluted as much as they used to be when the BF-BOF route of steelmaking was the dominant method. In addition, export customers

tend to be less stringent than domestic mills. This shift has resulted in a general lowering of standards for most scrap grades.

To ascertain how this is impacting the market, we put the most pertinent questions to Sachin and Dan to get a preview on the discussion that will take place on Thursday October 31:

Why do consumers accept this trend and is this why they are investing in DRI plants?

Sachin: Consumers have been lazy, to put it bluntly. They have not invested in available scrap inspection technology and they do not hold their buyers responsible for scrap quality. The investment in DRI is completely unrelated however; this is motivated by cheap natural gas, which is supplanting coke as the most efficient way to reduce iron oxide.

Dan: The significant increase in the use of iron-based raw materials by the US steel industry during that same time period has tended to dilute and mask the shift.

What has been the impact of the export market on scrap quality? If mills want high quality scrap to remain in the US should they look at valuing quality differently?

Sachin: High quality scrap is not leaving the US, for the most part. So putting a higher value on scrap is not going to prevent exports. But valuing higher quality scrap will allow for more differentiation of quality in the domestic market, which will ensure that quality scrap goes to the domestic mill that truly values it.

Sachin Shivaram Dan Pflaum




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Dan: Over the last 30 years the volume of scrap export has dramatically increased. Many of these export market consumers are more lenient on the quality and chemistry of the scrap they will accept. Because scrap is like water, it flows to the path of least resistance. This shift has resulted in a general lowering of quality standards for most scrap grades. In many cases, scrap consumers are faced with either paying more and expecting a better quality (while relying on visual inspection to characterize the material) or be willing to accept the “commercial” quality of the grade offered.

Is visual inspection the best method?

Sachin: Absolutely not! Visual inspection is an antiquated system and needs to be replaced by inspection that can get at the chemistry of the steel.

Dan: The increase in copper levels in shredded has been a gradual deterioration over the last 30 years. Visual inspection provides a very limited capability to detect this slow shift during the last 30 years. Science and technology now exist to very precisely report the elemental analysis of shredded.

Are mills doing supplier evaluations in order to separate less capable suppliers?

Sachin: Some mills are doing this, but unless all mills get on board there will be a significant disadvantage for those who move first.

Dan: Many mills are doing regression analysis, melt tests and sampling techniques to determine the quality of the scrap they are receiving. Mills need to recognize that their furnaces are not the quality control device of the scrap industry and should require scrap processors to monitor, control and report the chemistry of the products they supply consumers. Buyers should accept scrap from suppliers with best practices and technology; recognize that all scrap is not created equal and value it based on not its physical description but its metallurgical value; establish a copper level that is optimum for their mill’s product line and demand that scrap processors provide science and fact-based evidence of meeting this specification; realize that low-price scrap doesn’t always equate to lowest cost liquid steel and move to a value-based pricing mechanism.

Hear more about these suggestions and see how viable they may be for the industry at the conference later this month.




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7th AMM Steel Scrap Conference

This white paper has been created in conjunction with Metal Bulletin Research for American Metal Maket Events’ upcoming 7th Steel Scrap Conference being held on October 30-31 in Chicago, IL.

With over 200 delegates expected, this is an ideal opportunity to meet your customers and suppliers in the burgeoning market as well as hearing from the senior level decision makers at market leading companies discuss the following:

North American supply and demand dynamics

North American economic health and pricing trends

Scrap industry trends

Trade, risk and reward

Steel and scrap industry highlight discussions

International outlook

And more…

For more information, please visit the website at www.amm.com/events/scrap or view the brochure here

Unless specified, all data is sourced from Metal Bulletin Research


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A Strategic Outlook to theGlobal Ferrous Scrap Industryout to 2021

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