Scrap demand of South Korean steel mills is expected to increase to 30% to around 7 million tonnes (mn t) in the years to come, as per a SteelDaily report. South Korean steel giants POSCO and Hyundai Steel have already scaled up efforts to reduce hot metal production in blast furnaces in a bid to go carbon-neutral by 2050.
Since May’20, the steel companies have increased their proportion of scrap used in converters to 20% from the earlier 15%. Further, they have plans to increase the usage to 30% in the future.
At present, South Korea’s scrap consumption is about 29 mn t/year. If steel mills keep up their usage at 20%, the country’s overall scrap demand is expected to rise by 2.45 mn t/year, amounting to 31.45 mn t/year. And, if the consumption increases to 30%, the overall demand will reach 35.94 mn t/year.
As of 2019, the amount of scrap generated in the country is about 22.8 mn t which means the remaining 13 mn t may have to be imported.
POSCO has already increased its scrap imports. It is also expanding the usage of alternatives to steel scrap, such as hot-briquetted iron (HBI).
Moreover, with global steel companies also stepping up to reduce CO2 emissions, global scrap demand is likely to increase more than what is expected by the industry, SteelMint understands.
POSCO to set up 2.5-mn t EAF steel mill
SteelMint had reported earlier that the Carbon Neutrality Committee in South Korea is looking to replace domestic blast furnaces with electric-arc furnaces, develop a hydrogen-reduction steelmaking method, and replace the blast furnace iron-making method. This seems to have left domestic steel companies like POSCO with no choice but to invest in electric furnaces. In fact, the steel major is considering plans to build the second electric-arc furnace of 2.5 mn t/year capacity.
If this happens, scrap usage of the top South Korean steelmakers will increase further compared to the amount that will be used due to reduction in hot metal production.
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