Stainless Steep Scrap VS Nickel Pig Iron
For more than ten years, there has been a dramatic discrepancy in the stainless steel sectors of Europe and Asia. Specifically, Europe's production of the crucial metal has been characterised by extensive use of stainless steel scrap, as opposed to the continued rise in the amount of nickel pig iron (NPI) used as feedstock for melt-shops across Asia.
This discrepancy appears to be narrowing, according to experts in attendance at the 2023 International Business Summit of the Materials Recycling Association of India (MRAI), which recently took place in Bangkok, Thailand on the 21st and 22nd of August.
One of the panellists was Tobias Kaemmer, who is the CEO of the Oryx Stainless Group based in the Netherlands. Kaemmer pointed out that the current stainless steel output of Europe is based on a massive 94% scrap content, representing an increase of around 55% since the founding of the company three decades ago.
Ten years ago, the Oryx Stainless Group established operations in Thailand; this decision was made for numerous reasons, one of which was because of the 'global regionalization of stainless production, with Europe having a “protective system” involving duties and tariffs surrounding its stainless steel sector'. During these ten years, Asia's stainless steel industries boomed, with the majority using NPI, sourced from mined material, in their melt shops.
Kaemmer pointed out that the nature of protective systems in Europe is changing, with the focus shifting away from 'across-the-board duties' in favour of Carbon Border Adjustment Mechanisms (CBAM). Such a mechanism would only place these substantial duties on metals that create a high carbon footprint in their process of production.
The CBAM on stainless steel production, which includes a detailed auditing process, could come into effect as soon as this October, a fact that is 'already prompting big ticket investments' according to Kaemmer. As a relevant example, he identified Italian rolling mill operator Marcegaglia as purchasing a scrap-fed stainless steel melt shop here in the UK in 2022. He also pointed out that Tsingsha Steel, a company based in China that has historically relied on the use of NPI, is set to open a scrap-based production line.
Vishal Wadwha, representing India's Jindal Stainless at the MRAI summit, predicted that the global endeavour to reduce carbon emissions would 'lead to a resetting of market prices of key raw materials, including both NPI and stainless steel scrap'.
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