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“Green” metals production is a term without a unanimously accepted definition, but panelists at more than one 2023 Material Recycling Association of India (MRAI) International Business Summit session largely agreed recycled content fits within that definition.
Corporations identifying recycled content as a pathway to a lower carbon footprint and governments using carbon border adjustment mechanism (CBAM) duties on imported metal were each identified as factors spurring demand for scrap metal globally.
Puneet Paliwal, a Mumbai-based senior analyst with United Kingdom-based CRU, told delegates steelmaking represents an estimated 7 percent of global greenhouse gas (GHG) emissions.
On average, said Paliwal, one ton of steel production creates 2 tons of CO2 emissions. While melting scrap may not be a “panacea,” said Paliwal, it is “part of the solution.”
An analysis conducted by CRU classifies steel that can be made with fewer than .4 metric tons of CO2 emissions per metric ton of steel produced in its “green” steel category.
Currently, scrap-fed electric arc furnace (EAF)-made steel may be one of the few ways to reach this “green” category, with much lower emissions rates than blast furnaces. Paliwal added that methods using hydrogen power to melt direct-reduced iron (DRI) in an EAF mill are making advances. He also noted that EAF production overall, while emitting more carbon, “consumes a lot of energy.”
Nonetheless, based on corporate needs and CBAM hurdles being formed in Europe and the United States, Paliwal and CRU foresee green steel fetching a market premium as this decade continues. “We believe this will hit its peak in the 2030s,” added Paliwal, suggesting by later next decade a critical mass of steel output will be reach an acceptably low-carbon status.
At an MRAI International Business Summit session focused on stainless steel, Nishta Mukerjee of India-based information services provider SteelMint and Tobias Kaemmer, CEO of the Netherlands-based Oryx Stainless Group, also emphasized the decarbonization movement as creating major changes in that sector.
Paliwal and Kaemmer were among the presenters who said demand for recycled-content metal—and a willingness to pay a premium—is coming from manufacturers of automobiles, appliances and other goods.
At another session on nonferrous scrap, Chi Hin Ling, a commodities reporter for business information services firm Argus, pointed out that while London Metal Exchange (LME) nickel prices have dropped about 30 percent year to date, “stainless [steel] scrap prices have moved down by only about 10 percent,” showing implicit demand for the emissions-reduction-friendly material.
Mukerjee, in his comments, said China’s 56 percent contribution to global metals production GHG emissions levels leaves the door open for scrap to play a larger role there. India also is “in the mix” as a major metals industry GHG emitter, prompting its producers to likewise eye more scrap.
Vishal Wadwha of India-based Jindal Stainless said scrap’s role in lowering Scope 3 emissions is “the most important” role it plays, and said any growth in stainless steel production will lead to increased scrap demand.
S.K. Gupta of India-based MSTC Ltd., which is involved in product manufacturing and metals recycling, remarked, “More and more OEMs [who] rely on iron ore are thinking of increasing their inputs of scrap.” Scrap, stated Gupta, “has taken the center stage.”
The MRAI 2023 International Business Summit was August 21-22 at the Marriott Marquis Queen’s Park in Bangkok.
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