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Steel News November 02, 2017 12:30:21 PM

World Steel Association Outlines Challenges Ahead For Steelmaking Raw Materials

Paul Ploumis
ScrapMonster Author
The surge in Chinese steel production in the 2000s has boosted the demand for steelmaking raw materials including iron ore and metallurgical coal.

World Steel Association Outlines Challenges Ahead For Steelmaking Raw Materials

SEATTLE (Scrap Monster): The World Steel Association (worldsteel) has provided an outline of the challenges ahead for the steelmaking raw materials market. The publication by Dr Baris Çiftçi, Head, Raw Materials, worldsteel analyzes demand and supply trends in major markets across the world.

According to worldsteel estimates, the global steel industry consumes nearly 2 billion tonnes of iron ore, 1 billion tonnes of metallurgical coal and 550 million tonnes of recycled steel every year for production of crude steel. Recycled steel too is one of important steelmaking material. As per estimates nearly 600 million tonnes of steel were recycled in 2016, out of which nearly 520 million tonnes were used by global steel industry. Steelmaking raw materials are one of the biggest commodities in the world in terms of production and consumption.

For instance, 2016 estimates indicate that around 2 billion tonnes of iron ore were produced by world countries. The exports of iron ore totaled around 1.5 billion tonnes, surging higher significantly when compared with 1.130 billion tonnes in 2010. It must be noted that the exports had almost tripled over the period of one decade starting 2001. Incidentally, iron ore is the third largest commodity in terms of production volume, only after crude oil and coal. Also, it is the second most traded commodity in the world, next only to crude oil.

The surge in Chinese steel production in the 2000s has boosted the demand for steelmaking raw materials including iron ore and metallurgical coal. Consequently, world iron ore exports skyrocketed from around half-a-billion tonnes in 2000 to 1.5 billion tonnes in 2016. The metallurgical coal exports grew from 180 Mt to 310 Mt over the same period. Australia has emerged as the primary supplier of these steelmaking raw materials.

According to worldsteel, the recent environmental reform regulations by Chinese administration have led to closure of several outdated induction furnace steel making capacities in the country. Consequently, the country has witnessed significant surge in steel production through BF-BOF route, which in turn has further increased the demand for iron and metallurgical coal as raw materials. The projected steel demand growth and shortage of domestic metallurgical coal reserves in India will lead to considerable rise in imports of metallurgical coal by the country. India is most likely to surpass Japan to become the largest metallurgical coal importer by 2020.

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