For many years, the recycling industry has presented a vast array of reasoned, well-substantiated arguments to illustrate its massive economic, environmental and social worth. The message has not always struck home with policy-makers and legislators, so it is particularly instructive to note that we continued to function throughout the pandemic because we are fundamental to sustaining a manufacturing sector deemed essential by those same policy-makers.

The recycling industry has stuck to its task during the pandemic, although not always at 100% capacity and also not without encountering many bumps in the road. There were restrictions on the way we were allowed to operate; there was the painful process of laying off valuable members of our workforce; and there were inevitable transportation problems as global movements came under stricter control in a bid to stem the spread of the virus. Adoption of unfamiliar ways of working included a temporary halt to those personal, face-to-face meetings which have always characterized our industry. 

And yet, the recycling industry quickly adapted to these new circumstances and simply did what it has always done: got on with the job. It should make us all proud to reflect on the fact that our industry has played its part in maintaining the world economy’s impetus at this difficult time.

2020 was a remarkable year in so many ways, not least the speed of recovery in China. Preliminary data from its National Bureau of Statistics indicate that, despite COVID and all the related tribulations, the country still managed to record 2.3% GDP growth last year. And one of the most visible signs of this growth was that, following the onset of the pandemic, its steel industry regained momentum faster than any other in the world. China’s crude steel production not only exceeded 1 billion tonnes, but smashed through this barrier on its way to a prodigious 1.053 billion tonnes and an increase of 5.2% over 2019. Crude steel output in the rest of the world fell around 8% to 811 million tonnes. 

For our sector, of course, the scale of the crude steel production increase in China has not been reflected in the country’s overseas purchases of ferrous scrap because of import restrictions. But are we about to see a significant change in this regard? In December 2020, the government of the world’s largest consumer of steel scrap announced new standards for “recycled iron and steel raw materials” which would permit imports meeting certain standards. 

The potential ramifications for our markets are obvious. According to figures collated by our esteemed Statistics Advisor Rolf Willeke, China’s steel scrap consumption soared 15% in 2019 to almost 216 million tonnes and was on course to grow again in 2020: the cumulative total for January-September last year of 155.2 million tonnes was only 1% short of the corresponding figure for 2019 despite a relatively slow first quarter in which China consumed 41.53 million tonnes.

A Chinese government statement about this import-related change recognizes the role of scrap in the eco-friendly development of its domestic steel industry. At our BIR Ferrous Division webinar last October, guest speaker Ian Roper of Shanghai Metals Market pointed to massive increases in the country’s domestic steel scrap generation and to its electric arc furnace capacity. Renate Featherstone of Wood Mackenzie told our June eForum that the integrated route would remain China’s main source of steel in the next two decades but that her company’s base-case scenario suggested scrap could still account for 33-35% of the global steel industry’s metallics requirement by the year 2040, rising potentially as high as 47%.

With steelmakers under mounting pressure to adopt environmentally cleaner production methods, Renate added that the first logical step to reducing harmful emissions was to recycle and reuse all available scrap. This view dovetails perfectly with a study conducted on behalf of German steel scrap association BDSV which concluded that use of steel scrap in Europe rather than the ore-based steelmaking route reduces climate change costs by up to Euro 20 billion per year. If we are serious about inducing a greener industry approach, the argument goes, then such savings should be reflected in the raw material pricing mechanism. 

Recycling is integral to the renewed “greening” of our planet. It was a word much used in 2020 but one which certainly applies to our industry: essential.