Ferrous Division: Terminology and energy costs dominate at Amsterdam meeting

The BIR Ferrous Division meeting on May 23 heralded the release of its 14th edition of “World Steel Recycling in Figures”.

This latest edition, covering the five-year period from 2018 to 2022, is also the first to enshrine a significant change in terminology agreed by the BIR Ferrous Division board: henceforth, the word “scrap” is to be replaced with “recycled steel” in its reports and publications. As divisional Statistics Advisor Rolf Willeke underlined to delegates in Amsterdam, a key aim of the change is “to resonate even more effectively with the public and policy-makers”.

In reviewing some of the publication’s key statistical findings for 2022, Mr Willeke noted that China had remained safe in its position as the world’s largest recycled steel user despite a 4.8% drop in its consumption to 215.31 million tonnes. A similar story applied to Turkey, which continued to be the world’s top recycled steel importer last year even though it recorded a 16.5% decline in its overseas purchases to 20.876 million tonnes. And to complete the pattern, the EU-27 maintained its position as the world’s leading recycled steel exporter in 2022 despite its outbound shipments sliding 9.4% year on year to 17.596 million tonnes.
The Ferrous Division meeting in Amsterdam also shone a light on a topic of crucial significance not only to the recycled steel sector but also to the recycling industry as a whole, namely energy costs. In a guest presentation from Ole Rolser, leader of the Global Energy Perspective team at McKinsey & Company in the Netherlands, it was noted that Europe’s spend on oil, gas and coal increased from 4% to 10% of GDP last year and that this expenditure would remain elevated “for the foreseeable future”. He attributed “record-high” global gas prices last year directly to the conflict in Ukraine.

For energy-intensive industries, many of which form part of the recycling industry’s customer base, these huge energy costs had led to production cuts or even shutdowns. Aided by a notable shift in householder behaviour, Europe’s power demand declined by 3-4% last year when compared to 2021 and by 6-8% in the period from September.

Having observed that crude oil prices had now returned to levels seen before the Ukraine conflict, Mr Rolser predicted a continuing decline before settling around US$ 50-60 per barrel.

Following a question from outgoing BIR President Tom Bird about the extent of energy company profit-taking now that prices had returned to lower levels, Mr Rolser explained that these businesses were in a high-investment industry which had to contend with substantial volatility. He also noted a greater reluctance to invest owing to the push towards decarbonization.

And in response to a question from George Adams of SA Recycling in the USA, the guest speaker expressed the view that, with the necessary investment, the EU could become energy-independent of Russia within just a few years. In his earlier presentation, Mr Rolser indicated that Europe has historically relied on Russia to meet around a third of its gas supply, with Germany, Italy and Poland the most exposed.


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