Steel scrap: A world-traded commodity

To most, the word ‘scrap’ evokes visions of unwanted, discarded leftovers. However, to the steel industry, scrap represents a vital resource that enhances all aspects of steelmaking.

The recycling of scrap metal is an integral part of modern steelmaking, improving the industry's economic viability and reducing environmental impact. The recycling of steel scrap reduces the need for iron ore extraction, significantly reducing CO2 emissions, energy and water consumption and air pollution.

As a result of these efficiencies, steel scrap is increasingly being regarded as a raw material for manufacturing new products worldwide. Ferrous scrap – iron and steel – has become a globally traded commodity. The increased demand for steel scrap is reflected in recent trade statistics.

The United Nations Commodity Trade Statistics Database shows that the volume of global scrap exports increased from 9.3 million tonnes in 1990 to 106 million tonnes in 2011. Figures from the Bureau of International Recycling show that total world steel scrap use increased 7.6% in 2011 to reach 570 million tonnes.

The globalisation of the ferrous scrap market, however, also places stresses on the system. The long lifespan of steel products means that the amount of steel available for recycling cannot keep up with the current world demand for new steel products. With steel, structures can last longer than 60 years and cars often last longer than 12 years; steel products can be seen as scrap-in-inventory – meaning that the steel will not be ready for recycling until the long life of the product comes to an end.

A positive aspect of steel is the ease of recycling when products finally do reach the end of their life. The ability to recover and collect old steel products for subsequent recycling is greatly enhanced by the inherent magnetic properties of steel; consequently, a large tonnage of steel becomes available for recycling every year.

Figures from the U.S . Census Bureau and the U.S. International Trade Commission demonstrate that the U.S. is the world’s largest exporter of ferrous scrap – exporting nearly 23 million tonnes of iron and steel scrap in 2011. Globally, China, Taiwan, South Korea, India, Canada, and Turkey are the largest markets for exports of U.S. steel scrap in that same period.

Ferrous scrap exports from the EU to third countries reached a record high in 2012. The 27 member states exported around 19.22 million tonnes of iron and steel wastes and scrap valued at €6.8 billion (US$8.8 billion) to countries outside the Union (extra-EU trade), according to preliminary figures released by the European Statistical Office, Eurostat. The export volume exceeded the 2011 amount of 18.81 million tonnes by 407,000 tonnes or 2.2%. The UK was by far the largest exporter of the EU-27, shipping nearly 5.2 million tonnes of ferrous scrap outside the EU. The most important destination country for EU ferrous scrap was Turkey.At 11.05 million tonnes and a value of €3.3 billion (US$4.3 billion), around 58% of all extra-EU ferrous scrap exports headed to this country.

“This high level of scrap consumption is a reflection of the steel industry’s commitment to conserving energy and natural resources,” said Gregory Crawford, executive director of the Steel Recycling Institute in North America. “Scrap steel is used in everyday products, including packaging, appliances, automobiles and construction. Each year, more steel is recycled in North America than paper, aluminium, plastic and glass combined.”

This flow of scrap also faces challenges in the form of trade restrictions. The Organisation for Economic Cooperation and Development (OECD) reported in 2012 that North American and European ferrous scrap is traded openly, but that about 1Nike LunarEpic Flyknit