BIR Convention: Europe’s ferrous scrap appetite growing

Steel mills are making adjustments to use more scrap, but traders worry about their ability to export the surplus.

Although ferrous scrap crossed borders in abundance in 2021, trade policy concerns emanating from Europe have recyclers and traders worried about the near-term future of the sector. The issue loomed over discussions at the Ferrous Division meeting at the 2022 Bureau of International Recycling (BIR) World Recycling Convention in late May in Barcelona. BIR attendees also heard, however, that steel mills in Europe are reconfiguring to consume more scrap on the continent.

Steelmakers in Europe will be using more scrap as they attempt to reduce the carbon footprint of their operations, said Eric Niedziela, chair of ArcelorMittal France in his guest speech at the BIR Ferrous Division meeting.

Niedziela outlined the global company’s strategy for achieving a 25 percent reduction in its CO2 emissions intensity by 2030, including a goal of 35 percent for Europe. Those plans include setting up what ArcelorMittal calls the world’s first full-scale zero-emissions steel plant by 2025 at Sestao in Spain.

Among measures designed to achieve its targets, the group envisages “a huge increase in our scrap demand” and is looking to secure its raw material supply via “acquisitions, long-term contracts, joint ventures or whatever we can discuss together,” the executive said.

Fellow guest speaker Cinzia Vezzosi, immediate past president of the European Recycling Industries’ Confederation (EuRIC), said preventing ferrous scrap from leaving Europe through a proposed revision of the EU’s Waste Shipment Regulation would leave almost 20 million metric tons of ferrous scrap looking for a new home. This would “break the circular economy chain” in Europe and lead to lower collection rates, she commented. “Shutting down this flow will create a massive earthquake in the market,” Vezzosi said.

The EuRIC officer also said there is potential for greater use of ferrous scrap in Europe since its current usage rate of 57.6 percent in 2021 was below, for example, the 69.2 percent rate achieved in the United States. She added, however, that business conducted between Europe’s scrap suppliers and consumers needed to be “absolutely fair” and “linked to international prices.”

BIR President Tom Bird insisted the steel industry should not look to achieve its goals “at the expense of free trade in scrap.” If scrap exports were seriously compromised, he said, “recycling rates go down” and “no investment takes place within our industry,” thus negatively impacting the steel sector too.

While Niedziela questioned the validity of exporting scrap to countries that might then compete on the European steel market with more carbon-intense products, he also said, “I’m not saying we should stop the market. We have to manage this properly in Europe.”

The 2022 BIR World Recycling Convention was May 22-25 in Barcelona.