A report published by Wood Mackenzie this week states
that since consumer and investor pressures asking for recycled content are
starting to change the scrap metal market, demand for this material is expected
to grow over the next two decades, with an additional 200 Mt per annum of steel
scrap and 75 Mt per annum of aluminum used by 2040 compared to current demand.
Beyond what happens in the private sector, policies
that mandate greater recycling rates are also driving cleaner and more reusable
scrap collection.
“Governments across the globe generally share a focus
on keeping reusable materials out of landfills,” WoodMac’s principal analyst,
Renate Featherstone, writes in the report. “These should, in theory, lead to
greater scrap availability and use. However, there are no universal laws that
encourage the consumption of recycled materials.”
According to Featherstone, the fact that there isn’t
a global vision on the use of scrap metal means that, despite the increased
demand, the material is still expected to remain underutilized compared to its
overall availability.
“Europe, for instance, collects scrap but does not
have enough scrap-smelting capacity to use all the scrap generated,” the document
reads.
“Consequently, vast quantities of scrap are exported.
Unverifiable quality for end-of-life scrap has deterred higher scrap use. But
solid waste management laws are tightening, leading to increased scrap
separation and quality monitoring.”
For the market analyst, in addition to policy
changes, the wide-scale use of scrap metals must go hand-in-hand with
compelling incentives and quality assurance.
“Wood Mackenzie believes a strong economic rationale
exists for greater scrap processing and use. Capital investment costs for
aluminum scrap processing facilities are typically 10% of primary metals, and
50% or less for steel,” the report states.
“From an environmental perspective, secondary
aluminum production has a carbon footprint five to 25 times lower than primary
metal production. For steel, the largest industrial emitter, emissions can be
around 30% lower compared to today, despite growing demand.”
The UK-based firm estimates that using all available
scrap could bring down aluminum and steelmaking emissions by up to 600 Mt a
year each and that if a universal carbon tax rises to $110/tonne, each relevant
industry could save $66 billion a year.
Despite these positive outcomes, WoodMac points out
that even with increased availability, scrap cannot eliminate the need for
primary metal.
“Mining, refining and smelting will remain part of
our lives for many decades to come.”
Source:
mining.com