Revolution in the global metals market in light of the rising importance of recycled materials
In collaboration with ICEF, Russia’s leading finance university, this report examines the ongoing revolution in scrap metal usage in China. We expect this source of metal, as well as China’s slowing economy, to add serious pressure on metal prices this decade.
o Revolution is on: Chinese scrap fed steelmaking grew 194% in 2016-19
o Base metals catching up: Al/Cu accumulated scrap +35%/+8%
o Trend continues as metals used in China’s growth boom in ‘00s become scrap
o We believe steel scrap will account for 34% of total mix by end-‘20s …
… a steep rise vs 12% in 2019 and 5% in 2016
o Potential downside for iron ore and coal prices at c50%
o Steel prices should follow due to cost relief, with c27% downside
o China’s potential economic slowdown to add further pressure to prices
About the project
The end of the first decade of this century marks the rise in importance of the recycled materials, primarily in China. For instance, its ferrous scrap generation doubled in just 2 years and will rise going forward with a massive potential. In particular, scrap share in China steel production should rise from the current 10% to 30-40% within the next 5-10 years.
This revolution will change the whole global metals market as the new source of metals will replace primary sources, depressing prices further. The report will focus on the impact of that and will be sent to global leading portfolio managers who focus on Emerging Markets.
Reviews from project creator & mentor
The contributors were eager on meeting deadlines and daily calls, carefully analyzed the information received and performed the tasks provided. The exchange of feedback and good teamwork is another factor contributing to sucessfully finishing the research project.