Closing the Loop in Metals Recycling

Depending on the production route and raw material mix, producing one tonne of steel can emit up to 2.3 tonnes of CO2 (). As a result, the global iron and steel industry contributes around 7% of the global CO2 equivalent emissions (). These figures can be greatly reduced by closing the loop and increasingly using recycled scrap metals. One estimate indicates that every tonne of scrap used helps shave off 1.5 tonnes of CO2 during production (Worldsteel LCI database). This is not only the case for iron and steel, but also for the production of copper, aluminium, batteries and anything else where metals play a vital role.

However, today the share of secondary materials, like scrap metal, used for production still has room for improvement. For instance, the scrap share in refined copper production globally sits at only 17% (). 

One lever to improve this is to ramp up the end-of-life recycling rate of all metals used. Another lever is to ensure that the market for buying, selling and trading scrap metals is efficient. 

Scrap Trading Dynamics

Just like scrap itself, trading scrap comes in many different forms and shapes. At times it can be demand-driven and triggered by a steel mill requesting offers from scrap traders. Other times it can be supply-driven and triggered by a copper scrap trader actively offering material to a copper smelter. A closed loop can also be achieved with tolling agreements of a steel mill, which takes its customer’s scrap, processes it and supplies steel back to the same customer in their desired form.

Closed-loop recycling offers the additional benefit of reducing the CO2 footprint from transportation. A full truck can deliver scrap to a smelter/mill and load finished metal on the way back. This maximises capacity utilisation. In some cases, deliveries can even be made just in time, which requires advanced logistic capabilities and sophisticated software.

Scrap Trading Types 

Software Built for Scrap

At Metalshub we do not actively participate in the market of trading scrap. Instead, we equip its participants with the right software tools to trade most effectively and efficiently: 

• For demand-driven scrap markets, Metalshub provides smelters/mills with the right features to negotiate and conclude contracts (e.g., with multi-element pricing for stainless scrap);

• For supply-driven scrap markets, Metalshub helps sellers by providing an efficient request for bids (RfB) or auction mode to find the highest-paying counterparty;

• For scrap tolling agreements, Metalshub can set up the interface to manage tolling contracts, service fee negotiations and organising transport.

And, last but not least, no matter the market dynamics, Metalshub connects buyers and sellers of scrap to numerous pre-vetted counterparties onboarded since our launch in 2017.