High-grade scrap demand remains limited, secondary metallurgy important

Despite the push to lower steelmaking emissions, there is limited demand for high-quality scrap in Europe, while EU mills could follow their US counterparts and acquire scrap processors to have first refusal over scrap supply, said panellists at last week’s Kallanish Green Steel Strategies. Lower-grade ore can meanwhile be used to make DRI with good secondary metallurgy.

Olivier François, president of trade body Recycling Europe, told delegates at the Brussels event that association members have made significant investments into advanced scrap sorting machines in the past 12 months. However, they have found no customers for the so-called “E40 plus” scrap grade with ultra-low copper content.

“As a president of a federation, what can I tell my members? I tell them the truth. The truth is that for the moment, we invest, we can invest. We have money. Okay. We have a profitable activity, but we have to find a customer for this [scrap] quality. And for the moment, there is none.”

Vincent Chevrier, general manager technical sales at Midrex Technologies, said the situation in Europe reminds him of the US in the 1990s when mills started buying up scrap merchants. “And it really wasn't so much about pricing. It's not that they wanted the lower price or anything like that. It was really like the control and availability. They basically wanted to say, we want to be the first one to decide where we [the scrap supplies] go. These [scrap] companies still export today … But at least the EAF producers can now say, Okay, I'm saving this for me.”

He added that, as is the case in the US, most steel grades can be made in an EAF as long as there is reliable secondary metallurgy in the form of ladle refining furnaces.

François said US market players closely measure the composition of scrap, which allows mills to adjust their feed accordingly to save energy and cost. However, “there is absolutely no move in Europe with regard to the measurement of the composition. It's very strange,” he added.

In the case of DRI-making, Chevrier said it is a misconception that only high-grade iron ore can be used as feed. This stems from DRI-making being dominant in the Middle East, where the scrap pool has traditionally been limited, meaning mills cannot easily blend their feed and DRI quality must therefore be high.

“Now, if you project that into, say, Europe in the future, where you have a mixture of scrap, that scrap that's available … you can use other things, that requirement doesn't apply as much,” he noted. Electric smelting is one route to utilising low-grade DRI, or using a mix of high and low grade ore to make lower-quality DRI is also feasible as long as it represents only 30-40% of the EAF feedstock mix, he added.

Chevrier also noted that the idea of metallics hubs is nothing new and they present a good business case as they are a form of exporting energy. “HBI is a perfect vector to ship energy, because you don't have to compress it, you don't have to powder it. You could put it in a pile outside for a year, and it's still there a year later,” he concluded.

Source:Kallanish