Chapter Two Media Article

Demand For Scrap Steel Is Outpacing Supply

November 9th,2006

The high demand for scrap steel in developing countries, along with demand in China and India that is outpacing domestically generated scrap, will cause significant growth in the scrap metal market, according to the World Scrap Congress 2006 and research by Industrial Info Resources. This rush in demand is fueling the search for alternative sources of supply and the development of new technologies to abuse unproductive scrap. Estimates show that even if all technologically recoverable scrap were to be recuperated, the domestic feedstock available in tons would still be too low to meet material demands. At a meeting of the Ferrous Round Table of Bureau of International Recycling at the end of October, John Neu of Sims Hugo Neu, Richmond, California, noted that there was concern for the future of hard scrap when, two years ago, China was investing heavily in gigantic blast furnace-based steel production. But with substantial new electric furnace capacity being added or proposed in Turkey and a number of other countries, it is proved that scrap is not gone out of the market. He expects that scrap prices will probably increase in December and certainly in January when consumers fill for the winter ahead. In Europe, crude steel production has increased 4 percent to 100.7 million tons in the first half of 2006, while scrap consumption is estimated to have risen 5 percent over the same period to 53 million tons and could reach 106 million tons for 2006, reported Anton van Genutchen of TSR GmbH & Company, Bottrop, Germany. Ferrous scrap exports from the EU-25 region soared 124.1 percent in the first half of 2006. But when compared to the same period in 2005, EU shipments to India slumped 78 percent to 288,000 tons.

Relation To The Chapter:
In this article, scrapped steal is being demanded by many countries. The supply of scrapped steel is increasing because of the demanding from different countries are increasing. The rapid increasing of supply of scrapeed steel causing the pace of it to be overwhelm. The more people demand for a product, the more they will supply for it. As they supply more for it both the supply and demand curve will go up. As the supply curve goes down the demand curve will go down too.


Personal Reflection:
I think that the pace of supplying the scrapped steel is going too fast. If suddenly, people stop demanding for scrapped steel and they have a lot of supply of scrapped steel left they loose a large amount of money for producing and supplying the scrapped steel. In the end, they would just have to dump out all the supplying of scrapped steel. I suggest that they should produce a little more of the amount than all the people that demand for so there are only still left overs and could be sold to other people. That way they could save more money and less products being stored. Don't you all think this is a more convienent way to solve the problem?