Steel scrap is a steelmaking raw material used in crude steel production via the electric arc furnace (EAF), basic oxygen furnace (BOF) and open hearth furnace (OHF) process.
Steel products are commonly recycled at the end of their life cycle and include items such as: containers, cans/tins, automobiles, appliances, and construction materials. The iron content of these items typically ranges from 88-96%.
That said, there are three main types of scrap consumed in the steelmaking process with varying degrees of iron content:
- Home/Revert scrap generated and recycled within a steel works.
- Prompt/Prime scrap generated from the cutting of steel in the manufacturing of finished steel products.
- Obsolete/Old scrap end of life products i.e. vehicles, appliances and construction material.
For many years mills across the world have and continue to use recycled steel scrap in the steel production process, owing largely to its cost competitiveness in producing new steel via this method rather than mine iron ore and coking coal.
Steel scrap retains its inherent physical properties during the recycling process, and utilises lower energy and raw materials requirements in steelmaking compared to the refinement of iron ore and metallurgical/coking coal.
In many countries, the BOF steelmaking process uses between 15-25% steel scrap to turn out one tonne of new steel. While in EAF steelmaking, some mills can produce one tonne of new steel using steel scrap as the main raw material input i.e. almost 100%.
That said, Turkey is by far the worlds largest scrap importer, purchasing 22 million tonnes of material in 2012 from its main suppliers located in the USA, Russia, UK and much of Europe.
Metallics Market Brief:
Merchant pig iron, direct reduced iron (DRI) and hot briquetted iron (HBI) are commonly referred to as metallics and are also used in the aforementioned crude steel production processes as steelmaking raw materials.
These metallics products are produced via the smelting of iron ore using either natural gas or metallurgical/coking coal as a reductant and energy source, through certain processes.
Integrated steel mills produce blast furnace iron (hot metal) that may be surplus to their internal requirements and is cast into ingots and sold as a merchant product. Merchant pig iron is iron cast into ingots, cooled and sold as ferrous feedstock.
HBI is a premium form of DRI that has been compacted to give it enhanced physical characteristics, which make it ideal for handling, shipping, and storing as a merchant product.
Supply and demand:
India is by far the worlds largest producer of DRI/HBI at more than 20 million tonnes in 2012, given the countrys limited ability to generate steel scrap and its locality to the natural resources required in the DRI/HBI production process i.e. iron ore and coking coal. That said, Venezuela, Russia and Trinidad are the largest exporters of DRI/HBI, with each country exporting around 2 million tonnes per year to buyers in North America, Europe and Asia