In this episode, we continue our discussion on Green Steel development with Hatch advisory specialists Matthew Cramer and Sid Sengupta. We delve into the peripheral implications on iron unit supply amidst the massive technological shift in the steel industry. What happens to the global market for scrap and virgin iron units when blast furnaces are no longer the dominant steelmaking technology?
The transition to greener steel production routes heavily relies on a stable and growing supply of scrap and high-grade iron ore. Most proposed facility upgrades focus on replacing blast furnaces with larger electric arc furnaces and direct reduced iron (DRI) facilities. This shift will significantly strain existing supplies of high-grade iron ore suitable for DRI production and increase the number of scrap buyers in some markets. These changes have far-reaching implications for steelmakers' strategies, commercial structures, and competitive positions.
Our podcast suggests that the industry is scrambling to secure capital funding for technological changes, while the fundamental challenges are far greater. Decarbonizing the steel industry requires a complete rethink of value creation and industry structure. We will focus on the impacts of the limited supply of high-grade iron units and incorporate the concept of three development waves, along with the strategic risks associated with each..