Nowadays, a backward look at the old year always seems to be accompanied by a list of what made life ever more difficult for our business community. The world economy and the global markets do not enjoy uncertainty, and neither does the business world; we always seem to be trying to gain traction on shifting sands. Last year was no different.

Besides the standard fare of price turbulence and rising costs, we had to manage the repercussions of trade wars, quotas and tariffs. In addition, Brexit continued to undermine market confidence in 2019.

As I said at our meeting in Budapest last October, quotas and tariffs are perhaps the most potent threat to our scrap industry at the present time. The perils of government intervention rather than free and fair trade were perfectly illustrated at that meeting when guest speaker Viktor Kovshevny of Russian recycling association Ruslom.com explained how delays and indecision over the best way forward on exports had cost the domestic scrap industry hundreds of millions of US dollars.

Rest assured that BIR, the US Institute of Scrap Recycling Industries and other major bodies around the world are working hard to ensure that the interests of the recycling industry are represented where such matters are under discussion.

Global economic turbulence did not prevent 2019 from being yet another record-breaking year for crude steel production with a gain of 3.4% to 1.87 billion tonnes, according to worldsteel. But the same organization’s late-2019 short-range outlook is suggesting that China’s slowing economic momentum will trim its steel demand growth from 7.8% last year to perhaps 1% in 2020. Of course, China’s overall demand performance will be guided to some extent by the progress – or otherwise – of trade negotiations with the USA. At the time of writing, there is more reason to be optimistic that these two major economies will be able to resolve their issues and thereby boost confidence worldwide.

Pulling all of the worldsteel data together, it was projected that global steel demand would grow by 3.9% to 1.775 billion tonnes last year and by a more muted 1.7% to 1.806 billion tonnes in 2020. As worldsteel put it: “Global steel demand remains resilient despite an uncertain global economic environment.”

However, a key takeaway from this outlook is that the improvement in steel demand this year is thought likely to be driven by growth of more than 4% among emerging and developing economies excluding China. Conversely, the envisaged demand increase of just 0.6% for the developed world in 2020 would follow a 0.1% contraction in 2019, largely as a result of weakness in the manufacturing sector.

On the positive side of the equation, there has been no sign of pause in the rising global demand trend for our steel scrap – as underlined by the invaluable figures that continue to be collated by our statistics expert Rolf Willeke. In his update of the 10th edition of “World Steel Recycling in Figures”, he highlighted a year- on-year leap of 20.7% in China’s steel scrap usage for crude steel production in January-June 2019 as a consequence of higher pollutant emission standards set for China’s steel industry, a hike in most of its BOF mills’ scrap inputs and increasing domestic emphasis on electric furnaces.

In Budapest, Becky E. Hites of Steel- Insights LLC forecast that China’s scrap-intensive electric furnace production would soar from less than 80 million tonnes in 2017 to 142.6 million tonnes by 2022. At our earlier meeting in Singapore, growth in China’s usage of steel scrap was hailed as a major market factor by guest speaker Dr. Steven Vercammen of worldwide management consulting firm McKinsey & CompanyThe latter also; reminded us and the rest of the world about why our industry is so vital to the future of our planet. Only a few weeks ago, experts from various leading research organizations insisted that carbon emissions from human activities are the main cause of the worryingly sustained temperature gains seen in recent years. By raising the electric furnace share of world steelmaking to 40%, carbon dioxide emissions would be slashed by 400 million tonnes per annum, declared Mr Vercammen.

In his own words, using more scrap is a “no-brainer”.