Much of this recycled steel is used to produce new steel. Around 37% of the world’s steel comes from recycled material. Almost as big of a share of copper and aluminum, about 35%, is made from recycled metals.
Metso is in a unique position to serve the metals industry – from the raw material extraction and processing to recycling metals back into production as a secondary raw material. We help to achieve the circular business model, where products and parts are repaired, re-used, returned and recycled. In a world where sustainability is ever more important, being a vital part of the circular economy is a great privilege and passion for us.
Besides sustainability aspects, there are also strong economic incentives for using more recycled materials. For example, compared with primary production, producing steel from recycled steel scrap saves more than 60% in energy costs. For copper, the savings can be over 80% and for aluminum even over 90%.
China produces half of the world’s steel
The past two years have been challenging for the metal recycling industry. Low iron-ore prices have made recycled metals more expensive in relation to ore. Weaker scrap demand, in turn, has impacted the willingness to invest in recycling machinery. However, despite these unfavorable market fluctuations, the long-term outlook is positive.
For instance, there is still a great discrepancy between the share of steel production and the amount of scrap utilized China. The rapidly developing steel giant accounts for about 50% of the world’s steel production and around 80% of the iron ore imports, but China’s share of global scrap imports is merely 3%. The main reason for this is that the electric furnaces haven’t yet made their way to the east: 63% of the steel in the USA and 39% in the EU is melted in electric furnaces, but in China these furnaces cover only 6% of the capacity.
So far, China does not take sufficient advantage of scrap metals. Chinese blast furnaces utilize scrap in around 8% of their production, while in other countries the share is typically 15-20%. This, however, exemplifies the enormous potential in metal recycling: If China increased the use of scrap to 15%, it would mean more than 50 million tonnes of additional scrap consumption – a leap that equals the current annual consumption of scrap in the USA.
Like in China, more active use of recycled materials a little further to the south, in India, could help in solving some of the problems created by rapid population growth. Over 1.3 billion Indian people need new housing, new infrastructure and new products. The demand for metals is increasing fiercely: the Indian steel ministry estimates that less than a decade from now the steel industry will consume around 56 million tonnes of scrap metal every year.
Succeeding in the volatile metal recycling market
A significant trend in the metal recycling industry is the increasing variation of scrap material. In practice, this means that the relative share of traditional steel is falling and new materials, like plastics and aluminum, are stepping up. Scrap yards have to be capable of processing various kinds of feed material efficiently. Also, extracting valuable materials from shredder residue and recovering non-ferrous metals and plastics is extremely important in running a profitable scrap business.
Succeeding in today’s market requires efficiency in processing scrap material. Companies can adopt different strategies to achieve the efficiencies: Some might focus on higher capacity and volume plants collecting feed material from larger areas, while others set up processing yards close to the material source to minimize transportation costs. Whatever the strategy, it is important to have fit-for-purpose machinery.
Metso answers these needs with pre-shredders, shredders, shears and balers that are smaller in size and able to handle a wider range of different materials. We try to engineer products that not only meet current demand but also look as far into the future as possible – a future where the more efficient use of natural resources will only increase.
BIR Annual Report, Bureau of International Recycling, 2016.
Understanding steel scrap and the new LME ferrous contracts, London Metal Exchange, September 2015.
Copper Recycling, International Copper Association, 2013.