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How does steel scrap fit into a larger recycling picture?

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How does steel scrap fit into a larger recycling picture?

Comparing countries based on specific criteria is one of the most interesting and revealing ways to learn about the world. Some demographic information is well known, like China having the largest population (1.37 billion people) and Russia being the largest country (17 million square kilometers).

Others reveal drastic discrepancies like the life expectancy in Monaco (89.5 years) compared to that of Chad (50.2 years) or the number of airports in the US (13,513), way ahead of No. 2 Brazil (4,093).

That information comes from The World Factbook, a reference resource published by the US Central Intelligence Agency.

There are other organizations and publications that provide more niche-oriented data. One that caught my eye recently was country-by-country recycling rates listed by the Organization for Economic Co-Operation and Development. The OECD has 35 member countries and tracks, among other things, municipal waste recycling rates.

The totals do not include metal recycling, but there could be some parallels between municipal recycling tendencies and what ferrous scrap market players have come to know about country-specific scrap usage.

The human element of the scrap industry is one that has been talked about before in this space and one that makes the scrap market one of the most unique commodity markets in the world. A considerable amount of the ferrous scrap used in steelmaking throughout the world needs to be collected, unlike most other steelmaking inputs that are mined, like iron ore, coking coal and limestone.

Country-by-country mining rates generally depend on available mineral resources and their locations. Scrap collection is an entirely different animal.

According to the latest available data from the OECD, Germany in 2014 recycled 47% of all municipal waste. That was tops in the world. Germany also happens to be the largest ferrous scrap market in the EU-28, judged by internal scrap consumed and scrap exports. In 2014 the Germans used 19.16 million mt of scrap to make steel and exported another 9.5 million mt.

Municipal waste, generation and treatment (% recycled)

Belgium had the second-highest rate of municipal waste recycling among the OECD countries at 34% and was the second-largest scrap exporter among the EU-28 in 2014. It also sent 1.36 mt of scrap to fellow EU-28 countries and used 2.88 million mt of scrap in its own steelmaking.

There are some anomalies between scrap markets and recycling rates. Switzerland ranked third along with Sweden among OECD countries with a recycling rate of 33% but it relied on other country’s scrap for its steelmaking as a net importer. Switzerland was the largest buyer of German scrap and second-largest buyer of French scrap among non EU-28 countries.

Another headscratcher, the US, the world’s largest scrap exporter, had a municipal recycling rate of only 26%, which ranked 11th among OECD countries, behind Slovenia, Estonia and Denmark among others.

But it is hard to get around the most striking figure. On the opposite end of the scale is Turkey with a municipal recycle rate of 1%, worst among countries tracked. That is an alarmingly low rate and some in the steel industry may even be shocked by this figure. Turkey is a top 10 steel-producing country and it has the largest proportion of scrap-hungry electric-arc furnace melting capacity (around 65-70%) among major producers.

If you look at it through the lens of the scrap industry, the lack of a recycling culture in Turkey makes sense. Turkey produced 31.5 million mt of steel in 2015 and used 26.1 mt of steel scrap to do so, according to World Steel Association and Bureau of International Recycling figures. More than 16 million mt of that scrap was imported, making Turkey the world’s largest scrap importer, a title it has held this entire decade. No other country comes close, as the next largest scrap importer in 2015 was India at 6.7 million mt.

The available figures indicate there is at least a casual connection between municipal recycling infrastructure and cultural recycling habits.

What can be gleaned from this?

It has often been said that “scrap happens.” But it also needs to be collected, sorted, processed, etc. Some countries are great at it, some hope to be great at it and some are far from it. Looking to the future, there is no bigger elephant in the steel scrap room than China, which makes half the world’s steel. If China begins exporting scrap, it will change everything and some say it is not a matter of “if,” but “when.”

To gauge the “when,” some in the industry analyze the growing supply of domestically generated scrap in China. That growing supply comes from end-of-life projections for vehicles and appliances and from aging infrastructure that will ultimately be demolished. But once it is time to recycle those cars, appliances and structures, will there be companies ready to collect, process and ship it efficiently? And if not, how long will it take to establish that kind of infrastructure.

If scrap falls in a forest, and nobody is there to collect it, does it make a sound?