The face of Secondary steel is about to change in India

The face of Secondary steel is about to change in India

Recycled Steel is also known as Secondary Steel in industry terms. Since recycled steel today provides the same quality (mechanical and physical properties) as steel made from iron ore, it’s unclear why it's still referred to as "secondary steel."

The steel industry contributes about 7-8% of total CO2 emissions across the globe. The steel industry is under constant pressure to cut its carbon footprint and work toward sustainability. The government of India is also pushing toward greener technologies and aims to reduce India's footprint on a massive scale.

Steel recycling has historically been largely unorganized and mechanized in India, which has resulted in subpar steel production. However, that barrier has now been broken thanks to technological advancements in electric furnaces (EAF or IF) for recycling steel. Over the past few years, it has become apparent that Indian Secondary steel producers are putting more of an emphasis on larger facilities with cutting-edge automated mills, which leads to better quality and economies of scale.

It has become clear that small mills will struggle to match the price and quality of modern mills, which will cause their margins to decline and make them more unprofitable.

This is an opportunity for larger steel manufacturers to enter the steel recycling market. Tata Steel has already made announcements about its Punjab steel recycling facility.

As the secondary players are investing in larger plants to the tune of 1 MTPA, it poses a threat to large primary steel manufacturers. This is all due to the fact that technology is getting more affordable as time goes on.

Steel plates were the only product that secondary steel producers were unable to produce due to limitations in the melting technology to melt large quantities of scrap steel and the difficulty in obtaining scrap steel in India, a young and conservative nation. But as scrap becomes more widely available in the nation, it is anticipated that only ELVs will produce 30 million tons of scrap metal. Scrap imports have decreased recently, while domestic scrap production has increased thanks to Scrap Processing Machines. 

Since many primary producers have increased their scrap consumption over the years—from 10% to 28%* as of 2022 (source: steel mint YouTube video)—it will always be difficult to find scrap. This has occurred as a result of the need to boost productivity, cut carbon emissions, and balance the costs of their raw materials in light of the high price volatility of scrap and iron ore/DRI.

The smaller players will soon have trouble finding high-quality scrap, which will reduce their efficiencies and margins. The bigger players will have more price flexibility due to their promise of quality and strong brand recognition because they have deeper pockets and greater demand for their products. Utilizing a variety of new technologies is now essential for MS Long products. Only if they can produce steel goods of the highest caliber at the most competitive prices will these manufacturers have a promising future.

Processing the scrap correctly with the help of a Scrap Shearing Machine and feeding the furnace in accordance with the melting rate to achieve maximum efficiency and reduce losses is a good way to raise the furnace's efficiency.