Overview of U.S. Scrap Steel Industry

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Researched by Industrialinfo.com (Industrial Info Resources; Houston, Texas). According to the USGS, raw steel production in the U.S., in 2005, was around 92.4 million tons. About 55% of that was sourced from scrap steel. All of the steel scrap ended up as feed to steel mills. There are two types of steel mills - Basic Oxygen Furnace (BOF) and Electric Arc Furnace (EAF). The primary feed to BOF comes from pig iron produced in a blast furnace. This feed is supplemented by scrap iron. In 2004, there was 52.6 million tons produced by BOF at seventeen BOF plants, and ferrous scrap consumption at these plants was 16.0 million tons, or 30.4% of total BOF production.

The main feed for EAF plants is scrap iron and steel, where it is melted down to produce finished products. There are about 100 EAF plants in the U.S. In 2004, EAF produced 54.9 million tons of steel and consumed 52.3 million tons of ferrous scrap, or 95.3% of total EAF production. There are four sources of scrap iron - cans, cars, appliances and construction. In addition there is "home scrap", which is unsaleable steel generated at steel mills.

The methods of scrap recovery are discussed next. The source of steel from used cans is primarily curbside trash pick-up; although scrap from this source has suffered a decline because many trash haulers will pick up aluminum cans but not steel cans, for recycle. The largest source of scrap comes from automobiles. The steel content of a car amounts to 75% of the total car weight. The first step in steel recovery from junked cars is a car dismantling plant, where saleable parts are removed and the car is crushed. A separate group of establishments, about 200 of them, take the crushed car and shred it for sale to the nearest steel mill. Junked appliances are picked up curbside and delivered to the nearest scrap yard. In more and more cases the junkyard and shredder are being located at the steel mill site to reduce costs.

A large source of scrap comes from the construction industry. These are beams, bars, pipes and other structural shapes. The sources are demolished buildings and civil works. The pieces must be sheered for delivery to a steel mill.

There are various grades of scrap and the feed to a steel mill must be carefully chosen to suit the type of steel that the mill is making. As a general rule, the BOF mills are strong on ductile steel sheet, which is capable of being stamped into shaped forms like automobile fenders and hoods, whereas the forte’ of the EAF mills is the strength of steel to make structural shapes.

It is always cheaper to recycle steel than to mine virgin iron ore and move it through the process of making new steel. However, it should be understood that many steel applications are durables, and even though two out of every three pounds of steel are produced from old steel, the fact that cars, appliances and bridges last a long time makes it necessary to continue to mine virgin ore to supplement the production of new steel. Economic expansion creates additional demand that cannot be fully met by available scrap supplies.

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