Decarbonization on back burner as steel mills in survival mode: recycling convention

A bearish global steel market has forced steelmakers to put decarbonization goals on the back burner, Atilla Widnell, founder of Navigate Commodities, said at the Bureau of International Recycling's World Recycling Convention in Valencia May 27.

"Obviously, I hate to be the negative Nelly in the room about decarbonization, but really, steel mills all over the world have been in survival mode and some decarbonization plans have been shelved for the time being," Widnell said during a panel discussion.

According to a preliminary findings of a BIR and KPMG study on the environmental benefits of making crude steel from recycled steel, the rate of recycling-based steelmaking results in annual carbon savings worth "thousands of million metric tons."

BIR Trade and Environment Policy Officer Daniel Pietikainen told the panel the recycling industry was fueling massive environmental savings annually, with the carbon savings from using recycled steel equivalent to the emissions of large countries, water savings of trillions of liters and land savings of thousands of square kilometers.

However, steelmakers globally have been running at reduced capacities and sourcing competitively priced raw materials, as finished steel demand fails to pick up momentum, Widnell said.

Weak global manufacturing, trade uncertainties, oversupply and declining prices, and China's real estate crisis have weighed on steel demand.

Recycled steel consumption trend in 2024

Shane Mellor, BIR Ferrous Division president and the managing director of Mellor Metals, chaired the panel, saying that "with over 90% of global steel production now originating from countries with strong decarbonization targets, the demand for low carbon materials has never been greater."

"As metal recyclers, we are perfectly positioned as key enablers of this transition, but our impact must be demonstrated with robust credible data, data that not only quantifies our environmental footprint but also the transformative value of recycled metal in producing true green steel," he said.

According to data presented by BIR Statistics Advisor Rolf Willeke at the convention, China was the largest recycled steel consumer in 2024 at 209.67 million mt, down 1.9% year over year, with Turkey the largest recycled steel importer at 20.096 million mt, up 6.7%. The major suppliers to Turkey were the US, the Netherlands and the UK.

India, the second largest importer, saw a 23% dip in imports to 8.46 million mt. Major suppliers to India were the US and the UK in 2024, the data showed.

Price volatility impact

The Turkish market witnessed an influx of competitively priced Russian scrap in the past 12 to 18 months, along with Russian, Chinese and Malaysian billets, Widnell noted.

Given weak rebar demand, Turkish mills have often preferred buying billets as a better economic option than booking deepsea scrap cargoes.

The Platts, part of S&P Global Commodity Insights, assessment of HMS 1/2 (80:20) scrap CFR Turkey recorded a low of $335/mt CFR on Dec. 12, 2024, and averaged $381.18/mt CFR in 2024, down from an average price of $395.53/mt CFR over 2023, as high semi-finished steel import volumes limited upside throughout the year.

The price of Turkish exported rebar averaged $585/mt FOB in 2024, Platts data showed.

For India, prices remained weak throughout 2024, owing to low demand ahead of a general election, which was followed by the rainy season.

The price of imported containerized shredded scrap averaged $398/mt CFR Nhava Sheva in 2024, Platts data showed.