Significant Growth in Scrap and DRI Use Forecasted

Scrap metal and DRI (spongy iron) demand is forecast to be on the rise until 2019. On the other hand, the pig iron market is likely to remain dormant during this period. The growth in demand for steel products is likely to lead to a significant increase in global demand for scrap metal and DRI over the next five years. These predictions were made by the World Steel Association (WSA) during the recently concluded BIR World Recycling Convention and Exhibition in Dubai.

According to the CEO of WSA, Edwin Besson, the global demand for scrap metal will increase by 110 million tons per year to 695 million tons by 2019. The sharp increase in the use of scrap metal is in line with the projected jump in global steel product consumption. Steel demand is expected to reach 1.66 billion tonnes by 2020, and scrap demand is likely to show strong growth in China, Turkey, ASEAN countries and the NAFTA region.

It is predicted that by 2019 the share of electric arc furnaces in steel production will increase from the current 27 percent to 30 percent. The increase in EAF production will lead to an increase in demand for scrap metal. However, the production of electric arc furnaces could be locked at these levels due to a shortage of electricity and a shortage in the supply of scrap metal. Limited sources of supply of scrap metal have made it difficult to collect and recycle in many parts of the world.

Global DRI demand is likely to increase by 35 million tonnes and could reach 110 million tonnes by 2019. A significant expansion in the scale of Iranian steelmaking facilities will drive demand for DRI. Increased demand is also forecast in other regions such as India, the Middle East and the NAFTA region.

Meanwhile, the demand for pig iron is likely to remain at the same level of 1.25 billion tons, which is almost the same as the current demand. The Convention participants noted that the rise in the scrap metal segment is directly related to the metallurgical industry. A resurgent metallurgy can only help improve demand for scrap and DRI.