EESC Hearing Shipbreaking and the recycling society EU steel scrap market overview D. Valenti, Riva FE Brussels, 3 May 2016

Company’s overview Riva Forni Elettrici SpA Headquarters: Milan (I) Production sites in Italy, France, Germany, Belgium and Spain (+ one scrap yard in Canada) EAF-based steel production (scrap recycling through melting) Products: wire rod, rebar, merchant bars, mesh Workforce: 5000 p Production (2015): 7,4 Mt crude steel (EU Top 5)

Company’s overview

Production overview Wire rod Reinforcing bar (rebar) Mesh Merchant Bars

Steel scrap in the steel industry Steel scrap is the EAF steelmaking route’s main raw material but also (by far) its first cost item. Steel scrap (~65%) Energy (~15%) Labour costs (~10%) Capital costs (including maintenance, ~10%) Scrap can make up up to 20% of the feed of the BOF steel route (albeit most of it being home scrap)

The EU steel scrap market dynamics Steel scrap consumption relatively stable at 100 Mtpy.

The EU steel scrap market dynamics Surge of exports started in the « booming » years, making the EU scrap market « export-minded ».

The EU steel scrap market dynamics Scrap imports by origin and destination (2015)

The EU steel scrap market dynamics Scrap exports by origin and destination (2015)

The EU steel scrap market dynamics The scrap market is structurally under pressure, scrap prices going up faster than steel prices Scrap is traded globally, the market is driven by the demand in third countries (Turkey) Source: Platts

Steel scrap in the circular economy Steel is a « permanent material » which can be recycled indefinitely without loss of properties. Does this unique feature give steel a special place in the EU recycling policy? Steel scrap can be granted « end-of-waste » status Not really a success as only one MS (partly) enforces it EoW criteria already met by EU commercial grade scrap Less paper work if EoW Little effect on exports

Steel scrap in the circular economy Is scrap leaving the EU actually scrap? In which conditions is it treated/consumed? Issues raised in the EC Steel Action Plan (June 2013): Prevention of illegal shipments of waste (health and safety issue + economic issue + unfair competition) Waste treatment certification scheme (public consultation in 2014) Gap could be filled by a sectoral initiative: sustainable steel certification scheme, responsible sourcing criteria (mandatory vs. voluntary?)

Conclusions The EU is a net exporter of steel scrap Steel mills are price takers, EAF competitiveness is at risk EU scrap market could be improved: tackle illegal shipments of waste ensure that scrap is treated in state of the art installations (along the value chain), also outside the EU support sectoral initiatives in the matter (sustainability criteria)