29 October 2024 – Steel scrap is becoming an increasingly and jealously guarded resource. More scarce than you might think – but the world’s steel lobbies are investing heavily to keep it close to their production sites. And lending in the eurozone is reaching a new high.
Lending in the eurozone reaches new high
The latest data from the European Central Bank paints a positive picture: the lending volume of companies in the eurozone rose by 1.1 per cent in September, compared to 0.8 per cent in the previous month. At 5.16 trillion euros, this is the highest level in two years.
Households take advantage of favourable conditions
Lending to households also picked up, rising by 0.7 per cent compared to 0.6 per cent in the previous month. This is the strongest increase in a year and reflects growing consumer confidence.
Banking sector as the winner
Overall, growth in lending accelerated from 1.5 per cent in August to 1.6 per cent. European bank shares, as measured by the STOXX 600 Banks Index, have risen by almost 30 per cent since the beginning of the year, including dividends, making them the most successful sector in Europe.
Positive outlook for investors
Rising credit volumes with stable margins lead to potentially higher interest income, which accounts for around 60 per cent of the banking sector’s revenue. If this trend continues, European banks could
Steel scrap – the hard-fought resource
While iron ore used to be the most important resource in steel production, the trend is increasingly moving towards iron and steel scrap as the basis for the production of new steel. This is a megatrend in view of dwindling raw materials and the attempt to make steel production more sustainable and cleaner.
Export bans and steel scrap smuggling
Due to the growing importance of steel scrap, countries are increasingly being forced to impose export bans or taxes on the export of scrap. Kazakhstan, for example, recently extended its existing export ban by a further six months. There are also reports from the United Arab Emirates of illegal scrap exports to India that circumvent the UAE export tax on scrap.
Europe with persistent stainless steel scrap shortage
But scrap is also in short supply in Europe. Stainless steel scrap in particular is hardly available and many EU mills are now substituting scrap with nickel pig iron (NPI) and slabs from Asia. This is driving recycling associations in the EU to the barricades and raising questions about the proportion of scrap stated in the sustainability reports of domestic mills. At the same time, the constant Asian demand for stainless steel scrap is keeping prices high there.
Scrap with growth potential
Overall, ferrous scrap is therefore a raw material with growth potential. And with the lobbying efforts being made to keep scrap in the European Union, for example, it is clear how jealously the industry is trying to guard this scarce resource.
Just how jealously the industry is now watching over scrap reserves can be seen from the efforts of the EU steel lobby, which is investing a lot of effort in keeping the resource in the EU.
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Disclaimer: Many things here represent our opinion. Others are information from the Internet. We can therefore never claim to be correct or complete. And never base a business decision solely on the news you receive from us.
