The European Commission is expected to make an announcement on November 17 regarding the results of the review of its Waste Shipment Regulations. Although it is expected to impose a blanket ban on scrap exports from the EU, market opinion varies on this possibility.
Market sources have told SteelOrbis that a possible scrap export ban might apply to the countries which do not meet EU waste treatment standards (mainly non-OECD countries), explaining that in this case Turkey’s scrap imports from the EU may not see a drastic change in the short term. One trader said that the EU might prioritize restricting exports of bonus, shredded and busheling scrap and this might enable HMS scrap flow to Turkey to continue. On the other hand, an international steel producer commented that a blanket scrap ban might be in line with the EU’s carbon emissions target which requires transition to EAF and hydrogen-based production.
Cinzia Vezzosi, president of EuRIC, explained to SteelOrbis that any restrictions on exports should be applied gradually, because “it is evident that currently in the EU there is no industrial capacity to absorb the scrap that is exported today. Steelmakers are investing in the transition towards decarbonisation, but it will take years for us to reach a situation in which Europe consumes more scrap." According to Vezzosi, if the availability of scrap increases excessively in the domestic market, "the material would lose value, and there would be an interruption in the circular economy due to the fact that collecting scrap may become unprofitable." The president of EuRIC thinks "we should aim to stimulate domestic demand. For example, we could try to increase the use of recycled material in steel production."
For the past year, market participants commented on the issue from time to time. While some have asked for certain limitations on scrap exports, most market players stated that they do not expect a total ban on exports. For example, while Cesare Pasini of Feralpi supported restrictions on EU scrap exports, the European Recycling Industries' Confederation (EuRIC) is opposed to an export ban on scrap, “which is a valuable commodity priced and traded globally". At the latest IREPAS meeting, the panelists also saw the risk of a total scrap export ban as “mild” since “it is an important trade”.
The EU remains the world’s biggest scrap exporter, according to Eurostat, with 17.45 million mt of scrap exports in 2020 and 11.24 million mt of exports in the first half of 2021. Meanwhile, Turkey would be considered to be the most affected country by this possible scrap export ban since its scrap imports from the EU amounted to 11.93 million mt during 2020 and 9.78 million mt in the first nine months of the current year.
On the other hand, Russia and Ukraine are also mulling strengthening restrictions on scrap exports. While Russia is considering increasing its scrap export duty to €100/mt from €70/mt, Ukraine is seeking to increase its current export duty of $58/mt to $200/mt.