WORLD STEEL/SCRAP METAL FORECAST 2017 – 2018
In order for steel to remain profitable -24%-30% of scrap metal is used in its manufacturing to keep their costs low. Other benefits of using scrap metal is environmental; striping less iron ore from the mines. Coal is also used to fire the furnaces in the processing of steel. Recycled steel manufacturing that use the new arc furnaces also use less coal that reduces the carbon footprint. Mining coal is still ravaging the environment.
Some plants burn shredded rubber tires in their plants as fuel and in manufacturing steel.Mini mills run according to local supply and demand. If international prices go up, it may take a while before you see changes on the local level. The benefit is that it does prepare you for changes, especially of there is a drop in steel and scrap metal pricing. It will help you prepared for a download trend. Get your magnifying class out. The map below shows production for 2017 and 2018. Note the Mt=million tonnes. The EU growth rate is is 5.2%. In some places you read a growth of 0.4% to 2.3%. What is surprising is that Asia (China) looks like it’s going to take a big drop in 2018. There is supposed to be a slow down in China to level the playing field.
SCRAP METAL FORECAST 2017-2018
Earlier this year in Jan. 2017, the World Steel Association (Worldsteel), headquartered in Brussels, has released its short-range outlook (SRO)…In 2017, it is forecast that world steel demand will return to growth of 0.4 percent, reaching 1,494 million metric tons. The hope is that NAFTA and EU (European Union) are working on improving the price of scrap metal in conjunction with steel prices. Even though China is still in the forefront. It is hard to compete with cheap labour and low rent.
OCTOBER 2017 publication
So, world steel demand is recovering well, driven largely by cyclical factors rather than structural. The lack of a strong growth engine to replace China and a long-term decline in steel intensity due to technological and environmental factors will continue to weigh on steel demand in the future.” published by the worldsteel.org
Conflict in China and Korea are being repaired with diplomatic visits just last week (Nov 12,2017). It is better to get along, even compromises always results in an all win situation. They know it is mutually beneficial to remain co-operative and defuse any political uproars that may be ensuing.
We can only speculate and provide estimated values. Trends in pricing scrap metal are based on political and government situations as much as need for steel and recycled metals in their manufacturing. Thailand and Vietnam are showing greater demand for steel as they are experiencing growth in their countries. India is still being held back by their government to import steel and scrap metal. They are encouraged to buy and process steel/scrap metal locally. Brazil and the rest of South America have low growth numbers for 2018. To take a conservative approach. gwoth in scrap metal and processed steel looks very healthy with an estimated growth of 0.4% up to 3% growth.
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Note: Ferrous METALS are magnetic and iron based. Examples of non-ferrous metals are aluminum, copper and gold. As you know, they are not magnetic. It is a good rule of thumb when you are not sure how to categorize a metal. Take brass for instance. It is metallic but not magnetic. Brass is then categorized as a non-ferrous metal.