Year to date has provided a potent reminder of the extent to which global ferrous markets “remain highly exposed to geopolitical instability, energy disruption, protectionism, freight volatility and changing trade dynamics”, said BIR ferrous division president Shane Mellor of UK-based Mellor Metals Ltd. at a divisional meeting, held in June. The result of these sweeping developments has been a reshaping of steel flows and market sentiment, he added.
On the plus side, Mellor continued, it is becoming increasingly clear that recycled steel is no longer viewed simply as a secondary raw material. “It is the strategic resource at the center of true green steel,” he declared to delegates at the Swedish Exhibition & Congress Centre in Gothenburg.
While the industry must continue adapting to geopolitical uncertainty, trade fragmentation, changing supply chains and increasing quality demands, recyclers of the future will not simply supply raw material – they will become strategic partners at the very heart of the global steel industry, he insisted. The steel industry of the future, meanwhile, “will not simply depend on recycled steel, it will be increasingly shaped by it”.
As part of a session entitled “Recycled steel: the strategic driver of the 2050 steel industry?”, keynote speaker Tom Cheesewright addressed some of the key pressures and trends shaping tomorrow’s ferrous markets. A leading applied futurist who has helped a host of major organizations to see the future more clearly and respond with agility, he began by acknowledging that the signals in the market are “really confusing” at present. On the one hand, there is growth in arc furnace production and in demand for complex electrical steel; and on the flipside, there is global disruption emanating from, for example, conflicts and tariffs.
Construction was the first of three areas on which he focused his presentation. Whereas some countries have seen a rapid drop-off in their populations and so are reconstructing old infrastructure rather than building anew, there are also nations with rapidly-growing populations that are trying to build infrastructure as fast as possible, he said. Then there is the particularly interesting group of countries such as India which, he said, has identified a need to build more infrastructure but does not want to do so using yesterday’s technology.
Turning to the automotive sector, Cheesewright noted that cars are now “outlasting their predicted lifespan by quite some margin”, with the result that fewer and fewer will probably be coming to market. In volume terms, he expected that automotive will become “a declining source of recycled steels” and that, with more focus on high quality, recycling “is going to get increasingly challenging”. At the same time, he did not anticipate a wholesale shift to the use of aluminum.
Moving on to artificial intelligence (AI), Cheesewright said this is already driving interesting changes in the production of steel. He used the example of ArcelorMittal which is “applying AI pretty much across the business in a variety of different roles”, with one result being that the time taken to bring a new formulation of steel to market has been cut to a fifth of the norm. At the same time, the company has optimized recycled steel purchasing and now has the ability to use more lower quality material.
Mellor responded to the guest presentation by saying, “As recyclers, we often focus on the immediate challenges in front of us – freight pricing, trade flows and volatility – but your presentation reminds us that the structural changes under way may ultimately redefine the entire industry over the next 25 years.”
Published June 2024
