Terrific new report from Platts on the iron ore “scraptastrophe”.
Beijing’s visible hand: China’s demand for iron ore and scrap through 2020
The Chinese central government’s introduction of tougher environmental policies – including lower utilization rates over the 2017-2018 winter heating season – has brought new challenges of supply disruption and higher production costs. Ongoing production curtailments appear to be the “new normal” in China’s steel industry. This is spurring the growth of new electric arc furnace (EAF) capacity, much of which is being brought on in place of the traditional steelmaking route of blast furnaces (BFs) and basic oxygen furnaces (BOFs). S&P Global Platts forecasts a moderate decline in pig iron output between 2018 and 2020 as a result of steel scrap making inroads. It is calculated that approximately 50 million mt/year, or 5% of the iron ore import volume, could be displaced by scrap as China enters a new era of environmental regulation.
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