MRAI Forecasts Surge in Southeast Asia Ferrous Scrap Demand

SEATTLE (Scrap Monster): The two-day business summit hosted by the Material Recycling Association of India (MRAI) predicts 50% surge in Southeast Asia ferrous scrap demand, despite massive shift to iron ore and coal-based blast furnace and basic oxygen furnace (BOF) steelmaking.

According to Alexander Kershaw, senior analyst, Fastmarkets, the region’s scrap demand will see 50% jump over the next decade. Alongside, the region may see a jump in iron ore demand as well.

The Southeast Asia region will see huge rise in steelmaking capacity over the next few years. Approximately 30 million tonnes per year (tpy) capacity is coming up in Malaysia, out of which 21 million tpy is expected to come online by next year, said Southeast Asian Iron and Steel Institute (Seaisi). Indonesia is expected to add 3 million tpy in 2023 and 5.2 million tpy of steelmaking capacity in 2026. Also, several BOFs are under construction in the Philippines and Cambodia.

Although Seaisi expects drop in share of scrap-dominant steelmaking to 36% in 2026, when compared with 95% share in 2011, the demand for scrap will not change much. Since BOF requires scrap for operations, BOF growth will benefit scrap demand.