October 12, 2008

Scrap prices to boost substitution -IISI

Reuters reported that high levels of steel scrap prices will push consumers to shift to using other materials such as pig or liquid iron.

The report quoted Mr Tony Trickett GM of raw materials at International Iron and Steel Institute during a conference in Istanbul as saying that "High scrap prices will encourage the use of substitutes, such as DRI and pig or liquid iron.” He added that “It is already happening in places such as China and India.”

Mr Trickett said that steel producers either use scrap or different forms of iron ore for production. DRI contains more iron than pig iron and could be used by electric furnaces of mini steel mills.

Rebar prices, a semi finished form of long steel used in construction industry, has risen significantly over the last couple of months on the back of rising scrap prices.

Mr Trickett said that "Rate of old scrap formation is lower than the crude steel production adding that the tightness in the scrap market will continue, helping prices to remain high.”