For anyone worried that electric arc furnace steel-making (which mostly uses scrap metal) will take over from ore-based, blast-furnace steelmaking and potentially decrease the need for blast furnaces and plasma torches (since they wouldn't need pellets), think again.
The steel-makers themselves say, no chance.
A major steelmaking report just came out. And it's a good one. It underscores that blast furnaces are here to stay for a long time, which also means iron ore pellet are here to stay also.
The report was released by the Net-Zero Steel Pathway Methodology Project (or NZSPMP). Who are they?
A task force comprised of fifteen international steelmakers including ArcelorMittal, Tata Steel, GFG Alliance, Bluescope Steel, Nippon Steel, POSCO, Severstal, the Brussels-based World Steel Association and German steel association WV Stahl.
The just released study shows that primary steelmaking (using iron ore and pellets) will continue to be the major source of steel well past 2050.
Two key reasons:
1/ Insufficient scrap. There simply isn’t enough (and won't be enough) scrap metal to match demand.
“We can't rely on scrap to decarbonise steelmaking; iron ore (primary) based steelmaking will remain critical beyond 2050 ... steel production from scrap will only satisfy about 45% of future demand due to limited scrap availability."
2/ Too much new money into expensive blast furnacs. The asset costs of steel-makers are still considered "young", meaning major steel producers have too much recently-invested money in blast-furnace-based equipment. Currently, that mark sits at a low average asset age of approximately 13 years, in what is typically a long investment cycle of approximately 25 years to 40 years.
So, because blast-furnace/ore-based steel-making isn't going away, the industry group has two key recommendations for the future:
1/ that the steel sector's decarbonization targets and budgets should be split into two, between iron ore-based (primary steel) production and scrap-based (secondary steel) production, as they are quite different in terms of their decarbonization needs and that needs to be factored and dealt with separately, not as one approach overtaking the other.
2/ Govt funding needs to be part of the mix. "Due to the capital-intensive nature of the industry and potential current difficulties in investing, state aid is "very important in ensuring we can quickly move to a low-carbon future".
Source:
https://www.spglobal.com/platts/en/market-insights/latest-news/coal/072821-steelmaking-to-be-mainly-primary-based-beyond-2050-due-to-insufficient-scrap-nzspmp