Accumulating Scrap in China Could Reduce Demand for Coal, Coke
11/09/2017 - China’s scrap reservoir could more than double over the next eight years and enable a rise in electric arc furnace steelmaking – and drive a reduction in iron ore, coal and coke demand, according to Joseph Poveromo, president of Raw Materials & Ironmaking Global Consulting.
Poveromo, who spoke Thursday during the annual Met Coke World Summit, said the country’s scrap reservoir is forecast to reach 290 million tons by 2025, leading to an oversupplied market.
“So what will China do? They’ll probably begin to export scrap in a big way,” he said.
Should that come to pass, he said he’d expect to see international scrap prices fall, which would benefit electric arc furnace production at the expense of integrated producers, along with iron ore miners and coal and coke producers.
He said some have speculated that with so much scrap accumulating, China might make a wholesale change in production routes.
“But I would sort of caution against that because having a lot of scrap doesn’t automatically dictate a shift to EAF production,” he said, pointing out that there are other critical factors, such as an affordable and reliable source of electricity.
Met Coke World Summit is being held in Chicago, Ill., USA, and concludes today.
“So what will China do? They’ll probably begin to export scrap in a big way,” he said.
Should that come to pass, he said he’d expect to see international scrap prices fall, which would benefit electric arc furnace production at the expense of integrated producers, along with iron ore miners and coal and coke producers.
He said some have speculated that with so much scrap accumulating, China might make a wholesale change in production routes.
“But I would sort of caution against that because having a lot of scrap doesn’t automatically dictate a shift to EAF production,” he said, pointing out that there are other critical factors, such as an affordable and reliable source of electricity.
Met Coke World Summit is being held in Chicago, Ill., USA, and concludes today.
