For a decade or more, a prevailing story line in the stainless steel sector has been the rise of nickel pig iron as melt shop feedstock in Asia while stainless steel scrap predominates in Europe and Asia. That story line appears to be in the midst of changing, according to panelists at a stainless steel-focused session at the 2023 Materials Recycling Association of India (MRAI) International Business Summit, held in August in Bangkok.
Tobias Kaemmer, CEO of the Netherlands-based Oryx Stainless Group, portrayed stainless steel output in Europe as being based on 94 percent scrap content, up from around 55 percent when his company was founded about 30 years ago.
Oryx established operations in Thailand 10 years ago in part because of the global regionalization of stainless production, with Kaemmer referring to Europe as having a “protective system” involving duties and tariffs surrounding its stainless steel sector.
During that same span, the booming stainless steel sector in Asia—whether in China, India or Southeast Asian countries at facilities owned by Chinese and Indian producers—nickel pig iron (NPI) made from mined material predominated in melt shop usage.
The nature of Europe’s protective system is in the midst of changing, said Kaemmer, perhaps relying less on across-the-board duties and instead involving a carbon border adjustment mechanism (CBAM) that will place a substantial duty only on metals with a high carbon footprint.
The looming CBAM, which includes an auditing process that could start this October, is already prompting big ticket investments, said Kaemmer.
He pointed to Italy-based stainless steel rolling mill operator Marcegaglia S.p.A. buying a scrap-fed stainless melt shop in the United Kingdom last year as one such move, and said China-based Tsingsha Steel, which has long relied on NPI, is opening a production line “based on scrap.”
Concluded Kaemmer about CBAM systems looming in Europe and North America, “This is a game changer, and it is closer than we all think.”
Fellow panelist Vishal Wadwha of India-based Jindal Stainless stated that using 1 ton of stainless steel scarp in the production process saves up to 4.3 tons of CO2 being released into the atmosphere, calling scrap “the champion for Scope 3 emissions” reduction.
A global pursuit of lower carbon footprints will lead to a “resetting of market prices of key raw materials,” including scrap and NPI, predicted Wadwha. Higher stainless scrap prices should lead to increased “urban mining” he added, but also could lead to “scrap nationalism” protective measures.
Gopal Gupta of India-based Laxcon Steel Ltd., whose company produces 200,000 tons per year of stainless long products, is planning to double his company’s scrap-fed induction furnace-based output, and at the moment expresses satisfaction with his firm’s scrap providers.
“We are very, very happy with our suppliers,” stated Gupta. “Out of 100 containers, we may have complaints about only one or two. The quality is much better than 10 years ago.”
Oryx’s Kaemmer predicted scrap quality and demand will continue to rise, with producers of goods such as automobiles and dishwashers beginning to market the low carbon footprints and recycled content of their finished products.
Regarding the previous decade’s boom in NPI use in Asia, he remarked, “This reduced the cost but introduced more carbon in the atmosphere. There is now a [bigger] CO2 problem in the stainless sector that wasn’t there before, and I don’t think that’s a very smart development.”
The MRAI 2023 International Business Summit was August 21-22 at the Marriott Marquis Queen’s Park in Bangkok.