A government official in South Korea said on Thursday that South Korea plans to strategically manage steel scrap from cars and abandoned buildings and structures due to supply shortages and the price increase triggered by Russia's invasion of Ukraine.
He said Asia's fourth-largest economy is considering several ways, including an incentive system, to secure enough steel scrap.
South Korea is a major steel consumer, with its expanding automobile, shipbuilding and white goods industries. In 2020, 83% of its steel scrap was supplied locally, while Russia supplied 13%.
Lee Jae-yeon, an official from the metals and ceramics division of the ministry of commerce, said that the supply tightness caused by the war in Ukraine was effective as demand increased.
"Global demand for electric furnaces is increasing as they emit less carbon than blast furnaces," he told Reuters. “Demand for steel scrap, an important raw material for electric furnaces, is growing steadily. Managing it as a strategic material is part of our response.”
The world's sixth largest steelmaker produced 31% of its steel in electric arc furnaces in 2020, according to the latest data.
Consulting Wood Mackenzie predicts that crude steel produced in electric arc furnaces will increase to 48% of the global total by 2050, on par with conventional blast furnace steel production from 30% in 2021.
Russia's steel scrap prices are on the rise as Moscow imposes tariffs on exports this month to stabilize local prices.
South Korea's Russian steel scrap imports increased more than threefold in April, reaching $24 million, according to data from the Korea International Trade Association.
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