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Global eForum - Stainless Steel & Special Alloys Committee: Circular economy success depends on “fluid global market” for recyclables

  • 09 November 2021

Joost Van Kleef of Netherlands-based Oryx Stainless has added his own voice to recent criticism of “ill-conceived” regulatory proposals that threaten to restrict movements of recyclable materials. “No circular economy can be seriously considered and achieved without a fluid global market of raw materials for recycling,” the Chairman of BIR’s Stainless Steel & Special Alloys Committee insisted at its latest webinar on November 8. “It is only through maximizing substitution of primary with raw materials from recycling that we will succeed in optimizing the climate change mitigation effects of recycling.”

It is “quite ridiculous”, agreed guest speaker Sean Davidson, for politicians to talk about cutting carbon emissions and then propose policies that will serve only to reduce recycling rates.

Founder and CEO of the ferrous and non-ferrous scrap price-reporting Davis Index, Mr Davidson provided an update on the “very strong” stainless market, adding that “scrap generation simply hasn’t kept up with the pace of recovery recorded in finished stainless steel demand”.

While tight supply has driven US scrap prices around 30% higher in 2021, yards have been hit by margin compression resulting from “a lot of competition for material”, according to Mr Davidson. India, meanwhile, “is going to remain a strong market for a very long time” because of its still relatively small per-capita consumption of stainless steel and its “really low” scrap ratio. As for China, he predicted that stainless steel production in 2021 will exceed the 30 million tonnes projected earlier in the year.

Responding to questions from Mr Van Kleef and other members of the BIR Stainless Steel & Special Alloys Committee board, the guest speaker said that the US, Indian and Chinese markets are relatively bullish whereas Europe is unlikely to return to really strong levels before 2023.

Also asked to speak about the ferrous scrap market, Mr Davidson pointed to elevated finished steel prices in the USA but to substantially smaller increases for steel scrap owing to healthy supply as well as to higher metallics imports and domestic DRI/HBI production. This situation has assisted steel producers in achieving “great margins”.

Mr Davidson anticipated an increase in demand for steel scrap next year and some shrinkage in spreads.

Fellow guest speaker Rosie Hill, Business Development Manager at Ireland Alloys in the UK, provided an update on the “quicker-than-anticipated” recovery in superalloys demand following the “brutal” impact of COVID, including a rebound in the aerospace market which accounts for around 55% of total superalloy usage. The “green shoots of demand” have been emerging since June this year and the supply chain is currently gearing up in anticipation of a further significant improvement in 2022, she said.

The speaker underlined the “incredible” array of challenges that continue to confront superalloy producers like Ireland Alloys, including: labour and container shortages; higher freight costs; and the “still unclear” situation surrounding China’s customs reclassifications. But she reiterated: “There are signs of improvement and we have a positive outlook for 2022.”

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