India is now the second largest steel producer in the world with production up 17.8% to 118.1 million tonnes (MT) in 2021.
A common characteristic of the three main metals steel, aluminum and copper, of which India is both a major producer and a major user, is their infinite recyclability. But because the awareness of the importance of large-scale collection of waste of all kinds throughout the country and its disposal has come late in both government and industry, the recycling rate of all metals in India falls well below the world benchmark.
India is now the second largest steel producer in the world with production up 17.8% to 118.1 million tonnes (MT) in 2021. But unlike countries, which pride themselves on using increasing quantities of steel scrap to manufacture ferrous metal and thus limit carbon dioxide (CO2) emissions, India uses only about 30 MT of scrap annually. What is particularly disheartening is that even though the population of end-of-life vehicles (ELVs) is so large and tons of structural steel and white goods are regularly sent to landfills, adding to pollution, the country is required to import 7 MT of steel scrap per year. . However, our scrap metal imports in 2020 fell by 22.4% to 5.48 MT following the Covid-related 19.6% decline in steel production to 99.6 MT.
The much-heralded use of green hydrogen as a reducing agent in the blast furnace (BF) instead of metallurgical coal or natural gas will take a few years. Meanwhile, the steel industry in most countries including India is showing its determination to become more and more energy and resource efficient in metal fabrication and in the process of limiting CO2 emissions. . But India also needs to focus on recycling as processing one ton of scrap metal in the Electric Arc Furnace (EAF) will save 1.1 tons of iron ore, 630 kg of metallurgical coal and 55 kg of limestone, according to the Scrap Steel Recycling Policy (SSRP) developed by the Ministry of Steel. The policy direction should encourage the processing and recycling of scrap metal through “organized and scientific” metal recycling centers across the country. This should phase out scrap metal imports. The circular economy is about saving resources. In addition, the large-scale use of scrap metal for steelmaking will help improve the steel intensity of the economy. After all, per capita metal use here, at 76 kg, is considerably lower than the world average of 225 kg.
India is a big country. Large steel units based on BF-BOF are found in a handful of states, with the largest concentration of capacity being in Odisha. Moving metal from these centers to remote locations also becomes a logistical and costly challenge. Unlike BF-BOF plants, setting up EAFs does not require very large plots of land. To overcome the problems of acquiring large land and logistical hurdles in distributing steel over long distances, the country will do well to build many EAFs of varying capacity in different parts of the country to meet local demand. efficiently and profitably. In this way, it will become convenient to stimulate the demand for steel in semi-urban and rural areas.
Encouragingly, the strategy of dotting the country with small to medium capacity EAFs away from BF-BOF units has the support of the Ministry of Steel. Tata Steel Chairman, N Chandrasekaran said, “In India, we have ventured into the steel recycling business, a definite step towards a low carbon footprint production process in terms of emissions, resource use and energy consumption… We strive to push our sustainability ambition… by exploring manufacturing processes such as scrap. electric arc furnaces and gas-based direct reduction iron.
Passionate about promoting circularity in the industry, CEO of Tata Steel and MD TV Narendran decided to build a 500,000 ton capacity steel recycling plant in Haryana to produce “high cleanliness” waste , negligible contamination, high bulk density and no radioactivity” which will enable EAF to manufacture quality long steel. Previously, M&M, in partnership with MMTC, had embarked on the recovery of high quality scrap metal from ELVs. Maruti Suzuki and Tata Motors should follow the lead set by Tata Steel and M&M-NMDC. The Center for Science and Environment has estimated that India will have “more than 20 million highly polluting ELVs by 2025”. This gives an idea of the extent of scrap metal recovery from a single source. The country’s steel policy in 2017 indicates that 35% to 40% of the 300 MT steelmaking capacity expected to be built by 2030 should be based on scrap. Since the EAFs and induction furnaces here use around 40% DRI in their raw material, the scrap requirement in 2030 will be around 70 MT. Incidentally, India is the world’s largest producer of DRI with a capacity close to 50 MT. DRI is also used in the BF-BOF route of steelmaking at 15% to increase production efficiency.
The increase in steel production from scrap is a global trend. Incidentally, EAF has a 70% share of steel production in the United States. The use of scrap is also very high among steelmakers in Turkey and the European Union. The practice of recycling is rapidly catching up with steelmakers in Japan and South Korea. What about China, which plans to peak its greenhouse gas emissions in 2030 and then become carbon neutral by 2060? The country’s National Development and Reforms Commission said EAF’s use of steel scrap would drop from 260 MT in 2020 to 320 MT by 2025, reducing use by 410 MT of iron ore.
Being an importer of well over a billion tonnes of ore per year, China will spare no effort to utilize increasing volumes of low-grade ores found locally but after beneficiation. Meanwhile, Teri warned that unless remedial action, including the use of scrap metal, is urgently taken, CO2 emissions from India’s steel industry will rise dangerously to 837 MT from the current 242 MT.
(Former FT correspondent, author is now India correspondent for Euro Money Metal Market Magazine. Opinions expressed are personal.)