Current market developments in the European stainless steel sector were actively discussed during the Bureau of International Recycling’s (BIR’s) Stainless Steel & Special Alloys Committee session in Amsterdam.
Ritesh Maheshwari of India-based Shabro Metallic Pvt Ltd noted that the stainless sector in Europe was now suffering renewed price pressure and a sharp slowdown in production, with some mills reportedly operating at only 50pc of capacity utilization. Stainless steel demand had also declined in the USA following a drop in consumer spending on durable goods, whereas US stainless scrap exports jumped by 120pc annually during the first two months of 2023 to more than 73,000mt on improved demand from India, Taiwan, Mexico and Canada.
However, Maheshwari added that South Korea’s major stainless mill run by POSCO had restarted smelting operations at all furnaces following major flood-related stoppages. Besides, the Middle East was enjoying strong consumption and growth prospects for stainless steel following project announcements amounting to $2.3trn. Superalloy manufacturers were now booking orders as far out as 2025.
Speaking at the conference Dr Frank Pothen, Professor of Economics at Germany’s Ernst- Abbe-Hochschule Jena University of Applied Sciences and Senior Research Associate at the Fraunhofer Center for International Management and Knowledge Economy IMW, highlighted the ecological benefits of using scrap in stainless steel production. A Fraunhofer UMSICHT study earlier this year found that CO2 emissions were reduced by 6.7mt for every tonne of stainless steel scrap used.
Policy options suggested by Fraunhofer on how the “scrap bonus” of environmental cost savings could be internalized included, integrating mining into the EU emission trading scheme; and integrating raw materials and intermediate products into the Carbon Border Adjustment Mechanism. He argued that incentives to use scrap were better than mandatory utilization quotas and also insisted that EU export barriers would not only reduce scrap prices in Europe but would cut scrap use outside of the EU too, undermining climate policy efforts.
Markus Moll, managing director of Steel & Metals Market Research in Austria, Europe’s stainless steel industry is becoming “the ping-pong ball of politics” as the emergence of stricter climate goals coincided with competition from major mills in Asia, which draw from a supply chain that gives them the lowest cost in the world. He added that Europe is no longer cost-competitive as the industry disappears because of a lack of protection.
Moll mentioned that the rapid growth of nickel pig iron-based stainless steel production dragged down the overall 18/8 scrap ratio to an estimated 41pc in 2022, the lowest global total seen in a long time. He also confirmed his company’s projection of a 2.4pc increase in global crude stainless steel production in 2023 to just short of 58mn mt. China is expected to see a growth of 4.5pc whereas European production is likely to record a decline of 3pc following the almost 12pc drop in 2022.
