Supply of prime ferrous scrap grades and acceptable substitutes is expected to come under pressure due to additional electric-arc furnace (EAF)-based steelmaking capacity in the United States, according to Philip Gibbs, director of metals equity research for KeyBanc Capital Markets.
The proliferation of new mills over the next several quarters is going to structurally change the market for prime scrap and substitutes such as pig iron, hot-briquetted iron (HBI) and direct-reduced iron (DRI), Gibbs said during Fastmarkets' virtual Scrap, DRI and Mini-Mills conference on Thursday April 15.Between 2020 and 2022, annual EAF-based hot-rolled coil capacity in the United States will increase by around 7.6 million short tons, he estimated. That volume is equivalent to roughly 33% of apparent demand...