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Scrap

At the same time, most Asian countries increased their consumption of this raw material

Global consumption of ferrous scrap in the first half of this year, according to BigMint, decreased by 1.5% year-on-year – to 325 million tonnes.

The decline in consumption of this raw material was mainly observed in countries such as Mexico (-17% y/y), South Korea (-12%), Canada (-2%), the USA (-2%), Japan (-2%) and the Russian Federation (-2%), which led to a decline in the global total. This situation may indicate a decline in industrial production or a slowdown in economic growth, as well as inefficient production in these regions. For example, steel production in North America fell by 3% year-on-year in January-June 2024.

By contrast, most Asian countries led the race in scrap consumption. For example, despite the decline in steel production in China, the country increased its scrap consumption by 2.2% y/y – to 127.4 million tonnes in the first half of this year.

India saw the largest increase in scrap consumption in January-June, up 14% y/y – to 17.8 million tonnes. Domestic scrap accounted for 75% of this total (14 million tonnes, up almost 50% compared to the first half of 2023), while the rest was imported. However, imports of this raw material fell by 26% year-on-year in the first half of the year due to the availability of cheaper local scrap.

The growth in India’s scrap consumption in the first half of the year is consistent with an increase in steel production (+7% y/y in January-June 2024), as mills increasingly rely on this raw material.

Turkey increased its scrap consumption by 11% y/y – to 15 million tonnes in January-June. The country has recovered from the potential market challenges it faced last year, strengthening its role as a major player in the scrap trade and steel production by boosting construction and infrastructure development after a period of weak performance.

Since January this year, Turkey has seen a recovery in steel production. Fresh investment, new capacity coming on stream in the second half of 2023 and a focus on value-added products for the domestic market are supporting production growth.

Global trade in ferrous scrap in January-June 2024 decreased by 6% year-on-year – to 25.9 million tonnes. Large volumes of low-cost steel exports from China affected production in many regions, which put direct pressure on demand for this raw material.