As the steel industry is increasingly under pressure to reduce its greenhouse gas emissions, one obvious solution is toswitch to EAF steelmaking, which emits around a quarter of the CO2. However, unlike iron ore, scrap cannot simply be dug out of the ground. EAF production is therefore limited by teh amount of scrap metal available. This option is therefore limited in teh key developing economies where iron and steel emissions have soared in recent years.
SBB 23 May China should not be considering expanding its electric arc furnace steelmaking sector significantly for the next few years. Chi Jingdong, deputy secretary general of the China Iron & Steel Association (CISA), says it is too early to consider expanding the sector, even though EAF steelmaking is more energy-efficient.
Addressing a recent conference in Guangdong attended by Steel Business Briefing, Chi admitted that EAF steelmaking can help China’s steel industry to reduce its reliance on imported iron ore and to cut its carbon emissions.
But “China’s barrier to more EAF steelmaking is its limited ferrous scrap supply, since the country has a relatively lower accumulation of steel compared to developed countries,” he warned.
Chi further predicted that after 2020 China’s scrap resources will peak and then domestic scrap prices will drop to favourable levels. “At that time, mills may phase in more EAFs to replace their blast furnaces and converters,” he said.
Currently, most Chinese mills prefer to produce steel with BFs and converters due to the country’s tight scrap supply and lower production costs. “Mills won’t find using EAFs economical unless they can get a financial subsidy,” a major eastern mill source tells SBB.
Steel made via EAFs accounted for just 9.7% of China’s total crude steel output for 2009, while the global average percentage was 28.1% during the same period, according to CISA data.