Shortage of scrap might hinder CO2 reduction


SBB 27 April The costs and availability of raw materials will be two of the main challenge facing global steelmakers in coming years as growing demand pushes up prices and export restrictions keep raw materials from flowing freely around the world.

Remaining scrap reserves are already declining, said PS Venkat, CEO of ArcelorMittal Long Carbon America at last week’s Critical Commodities Conference in New Orleans.

With car production and building demolition down significantly in the US the president of US-based Southern Recycling, Joel Dupre, echoed the sentiments of Venkat that the availability of scrap is a huge concern.

A growing number of countries imposing restrictions on exports of raw materials could also cause shortages in supply, said Venkat. Countries already having export restrictions include China, Russia, Ukraine, India, Argentina, Azerbaijan, Egypt, Iron, Kazahstan, Saudi Arabia, Thailand and the United Arab Emirates, he pointed out.

Export restrictions are harmful, as they not only reduce international supply, but they cause raw material exports out of countries with no restrictions to be completely “sucked out” of those countries, said Venkat. They create pricing disadvantages and pricing volatility by increasing international prices and creating artificially low prices within the countries with the restrictions.

It’s a scary situation, Dupre said. “Where is (scrap) going to come from?” he asked the conference audience, which included Steel Business Briefing.

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