A major structural change to the volatile market for ferrous scrap will occur during the next 10 years, according to a study on scrap and scrap substitutes by CRU International of London.
Increased steel production via electric arc furnace (EAF) technology will lead to a tighter scrap market. The study examines whether this structural change will lead to permanently high prices, or whether supplies of scrap and scrap substitutes (such as direct reduced iron and iron carbide) will increase to fil the gap.
EAF Feedstock Shortage: Myth or Reality? predicts that Western world obsolete scrap recovery rates will increase by some 50 million tonnes per year by 2005, with particularly strong growth in Asia. However, Western world EAF production is projected to increase by some 80 million tonnes by 2005. Also forecast to increase, by about 30 million tonnes per year by 2005, is production of commercial steel sheet from mini-mills; this will, in turn, boost demand for scrap with low residuals. CRU also says growth in production of special quality bars and drawing quality wire rod will place additional demands on low residual scrap.
For more information, contact CRU International, 31 Mount Pleasant, London WC1X 0AD, U.K.
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