At the beginning of the year, the news of China’s cutback on steel production created ripples across the globe for steel manufacturers. Due to mandatory cutbacks owing to environment-friendly sanctions, steel production in the country was 5.6 percent less than average during June. Due to less production, it was predicted that the prices of iron ore and ferrous scrap will fall around the globe. However, this might not necessarily be the case for high-speed steel scrap. 

Here’s a look at future predictions for high-speed steel scrap in the coming years. 

Initial Predictions

With Europe also feeling the cutbacks caused by China, there was a reduction in demand for scrap, and it was initially predicted that October prices of obsolete grade scrap metals will fall by €20/tonne due to a reduction in demand in European steel mills. This would mean that the price of scrap would have fallen by €5-10/tonne in October when compared to the prices in September. However, surprisingly, the prices have remained more or less unchanged since September. 

Resurgence of Scrap

Contrary to the initial predictions, the European steel market managed to control the fall in price by adjusting their workable levels of scrap. The resurgence in prices of scrap metal is due to a sudden increase in demand for steel itself. The traders and stock market pundits predicted that steel mills will increase their energy surcharges in the future, leading to more demand for steel in the present. 

What does it mean for the Canadian Scrap Market?

The Canadian scrap market was hit hard by the pandemic. But fortunately, the market is recovering in 2021 as demand for high-speed steel scrap and other similar scraps is on the rise. Apart from this gradual resurgence, there is more good news for traders in the Canadian scrap metal market. With mounting pressure on governments around the world to recycle and use scrap in a more efficient manner, the global demand for steel scrap is expected to rise in the coming decades. Some predictions state an increase in demand of up to 200 million tonnes per annum for steel scraps till the year 2040. 

Hence, the prices of high-speed steel scrap and its counterparts are expected to remain stable or increase in the near future. 

Alnor Industries Ltd. has been a leader in the Canadian scrap collection and recycling business, handling a plethora of scrap materials such as copper wire scrap, beryllium copper scrap, high-speed steel scrap, titanium scrap, and more. Contact us today to know more about our facility and services.