11 May 2023 – The European Union could go from being an exporter to an importer of steel scrap in less than 5 years. And as steel production around the world increasingly switches to electric arc furnaces, a race is on for the coveted raw material. US inflation data surprisingly low – lowest since 2021. And demand for consumer credit in Germany up by double digits.
Is the EU turning from scrap exporter to importer?
In recent years, the European Union has exported about 18 million tonnes of scrap per year. Much to the displeasure of European steel producers, who have tried at great expense to enforce a complete ban on scrap exports, but have so far only been partially successful.
EU’s own scrap even scarcer in less than 5 years?
As was announced at the recent IREPAS meeting in Barcelona, the IREPAS raw material suppliers committee expects that in just 5 years all scrap produced in the EU will be used up by domestic steel producers.
Rising EAF production expected
The background to this is the increased switch to steel production in the EAF and the resulting sharp rise in demand for scrap within the European Union. And the availability of high-quality and unmixed scrap is already limited, as was recently heard again from Italy.
Export bans on the increase
More and more countries are imposing export bans to protect this raw material as EAF production becomes the leading technology in steel production. China, as reported yesterday, is also significantly expanding its capacities in this area. But India, which wants to become the largest steel producer after China, is already relying on almost 60% on coal fired EAF production. So the global hunger for ferrous waste will continue to increase and more than 70 countries have already imposed restrictions or bans.
EU soon to be a net scrap importer?
This means that the EU, which is currently still a net scrap exporter, could become a net scrap importer in no time – just as well that this dirty hole was left in the CBAM measure. But there could still be no scrap.
US inflation data falls beyond expectations
In a remarkable twist of events, the annual inflation rate in the United States has plummeted to 4.9% in April 2023, surpassing all initial projections by a wide margin. This significant decline can be attributed to the drop in energy costs, resulting in the lowest increase since 2021. Consequently, there is a strong likelihood that the US dollar will swiftly regain its strength, potentially leading to a weakening Euro.
Given the current advantageous circumstances, it is highly advisable to consider making timely purchases. By taking action now, before the USD experiences further appreciation, you have the opportunity to maximize your potential gains. This is particularly important, especially when considering the substantial inventory!
Germany: Demand for consumer loans rises significantly
In 2022, following a two-year period of reduced activity due to the impact of the coronavirus, there was a notable resurgence in the demand for consumer loans. One banking association in Germany revealed that credit banks specializing in financing consumer and capital goods experienced substantial growth, expanding their operations by double-digit percentages. The total value of newly issued loans reached 122.8 billion euros, reflecting an increase of 11.4 percent compared to the previous year.
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