Increased use of scrap steel could hit demand for metallurgical coal and iron ore, according to a new study by Boston Consulting Group and the World Economic Forum, as demand for a more sustainable approach to resource management increases.
“The world must, in the face of continued increases in population and per-capita consumption, find a way to live within its environmental means and to protect finite resources,” argue the report’s authors, Roland Haslehner, Benjamin Stelter and Nicolas Osio. “This imperative has profound implications for the mining and metal industry.”
The report analyses two future scenarios – one assuming the steel industry develops along similar lines as today (the ‘keeping a green line’ scenario); the other assuming a wave of regulation mandating increased recycling of steel (the ‘true change’ scenario).
In both the use of scrap in the steelmaking process becomes greater over time, diminishing the need for primary materials, such as metallurgical coal and iron ore. But under the true change scenario, demand for raw materials will taper off dramatically from 2020 to end back at today’s levels by 2015.
Under the keeping the green line scenario, demand for both iron ore and metallurgical coal continue to increase to 2050, although growth will slow.
“For mining players, the difference scenarios mean different things,” the report concludes. “The “keeping a green line” scenario envisions limited changes […] but it the “true change” scenario comes to pass, companies on the right side of the cost curve (that is, those with high production costs) will experience considerable pressure.”
Edited by Jonathan Rowland.
Read the article online at: https://www.worldcoal.com/coal/13102015/growing-use-of-scrap-steel-could-impact-met-coal-demand-growth-3003/