The European Union needs to increase crude steel production by 12-13% by 2027 to offset the expected reduction in imports amid protective measures against steel and the CBAM carbon regulation mechanism. At the same time, an additional 8-11 million tons of scrap steel will be required by the end of the decade to launch new electric arc furnaces and implement these plans. This was announced to Platts, a member of S&P Global Energy, by Stanislav Zinchenko, General Director of the Kiev-based GMK Center analytical center.
According to him, previously, the EU imported about 7 million tons of rolled products annually, and about half of this volume was produced in blast furnaces using the oxygen converter process. Now, he believes, a significant part of these supplies can be replaced by the production of steel in electric arc furnaces operating mainly on scrap.
To offset the expected decline in imports and ensure production growth of 12-13% by 2027 compared to the level of 2025, Europe will need an additional 4-6 million tons of scrap. Then, according to Zinchenko, by 2028, the commissioning of new electric arc furnaces may increase domestic demand for scrap metal by another 4-5 million tons.
Among the already announced projects in the field of electric arc metallurgy, he highlighted several major initiatives. These include the new Metinvest plant with a capacity of 2.7 million tons in Piombino in Italy, the Voestalpine projects with a total capacity of 2.5 million tons in Linz and Donavitz in Austria, the Marcegaglia enterprise with a capacity of 2.1 million tons in Fos-sur-Mer in France, the ArcelorMittal electric arc furnace with a capacity of 2 million tons in Dunkirk, as well as projects NLMK in Verona with a capacity of 0.5 million tons and in Belgium.
"These will be mainly scrap processing enterprises, at least in the early stages, until there is a sufficient volume of cheap direct reduction cast iron and hot briquetted iron on the EU market," Zinchenko said.
According to him, together these projects can provide additional annual demand for scrap in the amount of up to 5 million tons after the commissioning of the facilities.
"We are witnessing a clear pragmatic trend in which steel manufacturers prefer to increase the capacity of scrap-based electric arc furnaces rather than implement more capital—intensive hydrogen DRI projects," he noted.
At the same time, the forecast of scrap consumption, according to Zinchenko, is still based on a combination of scrap with DRI and HBI and does not imply maximum utilization of all capacities, since the actual performance of new electric arc furnaces is still unknown. The structure of raw materials will also depend on the prices of different types of metal raw materials and may vary from quarter to quarter.
The growth in demand in the future should support European scrap prices and stimulate