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