The Rising Influence of Rising Affluence

[winchem21]

75% of ~5 Mtons/year pig iron from Russia/Ukraine. Pig iron from this region has low phosphorus content compared with higher phosphorus levels in pig iron from Brazil; this becomes important in high spec steel products such as for auto applications.

EAF steel producers could quickly replace their pig iron inputs with scrap or HBI/DRI. CLF and NUE have both capabilities. This will put some added price pressure on scrap but no real effect on US production making capacity, since all the major US steel makers have already been taking substantive actions to slow the growth of domestic steel production.

X is also building a 0.5 a Mton/year pig iron facility being funded and built by a silent partner. This will be operational by early 2023. CLF is idling blast furnaces and could easily quickly convert one or two to produce the same amount of pig iron being imported from Europe, but CLF has stated many times they will not produce pig iron for other companies.

Importing pig iron to use in EAFs comes with higher overall CO2 emissions than from current blast furnace production. The trend is increased use of DRI/HBI to supplement scrap in EAFs. As scrap impurities rise, the need for higher quality metallics will continue to increase.