Posted on 17 Dec 2021
The use of scrap in steelmaking is likely to grow as the industry decarbonises, with the quality of steel made from recycled scrap on the rise, allaying long-standing quality concerns, says the Institute for Energy Economics and Financial Analysis (IEEFA). Australia is meanwhile likely to be most impacted by China’s move away from primary steelmaking towards scrap-EAF processes.
The blast furnace-basic oxygen furnace route is better at removing input material impurities for producing special steel grades such as AHSS (advanced high-tensile steel) or IF (interstitial-free high strengths). There has long been a debate about using EAFs to make these grades, but they comprise only a small portion of the overall production mix. In 2020, the share of the automotive sector – the most quality-sensitive category – was only 12% of total global steel consumption. Building and infrastructure products represent 52% of consumption.
The widespread use of scrap-EAF in the US, where scrap accounts for 71% of steel production, indicates the potential for large percentages of steel to be manufactured from scrap without major quality concerns, IEEFA points out. Steel-made-from-scrap quality is also on the rise, with US-based Nucor a prime example. The steelmaker is developing 3rd Generation AHSS for the automotive sector, which could previously be made only via the BF-BOF route.
The switch towards scrap-EAF production will however depend on scrap availability, which is limited. Short supply would raise scrap cost, making the scrap-EAF process less competitive with BF-BOF processes. This limits how much of BF-BOF steelmaking can be transferred to scrap-EAF.
“Even without increasing international pressure to reduce carbon emissions, iron ore demand in China – the world’s largest importer – will drop significantly in coming years,” IEEFA says in a report seen by Kallanish. “As the Chinese economy continues to mature, steel production is expected to peak in the mid-2020s (if it hasn’t already) and steel recycling is guaranteed to grow as more scrap becomes available.”
“A push for more steel scrap recycling would help China’s resource security aims,” it continues. “As China moves away from primary steelmaking towards more scrap-EAF processes while manufacturing volumes peak, there will be a global impact on iron ore and coking coal exporters, none more than Australia.”
Meanwhile, no company has announced a new industrial-scale carbon capture and storage (CCS) installation that could make coal-based steelmaking low-emissions, IEEFA points out. The system at a steel plant in Abu Dhabi “is in fact using the captured carbon dioxide for enhanced oil recovery (EOR) i.e., further fossil fuel extraction”, it concludes.
Source:Kallanish
