Global Steel Scrap consumption is expected to slump by -4.2% in the year 2020 highlighting a 25.5 million ton erosion in consumption. Thereafter the market is expected to recover and reach 756million tons by the year 2027 trailing a post pandemic CAGR of 4.1% over the analysis period 2020 to 2027.Steel manufacturers, especially those dependent on orders coming from the construction, automotive, and aerospace sectors are witnessing significant disruptions in business opportunities. It is already well understood that the COVID-19 crisis will result in shrinkage of capital resources; workforce layoffs/reduction and loss in productivity; supply chain disruptions; difficulties with funding. The slower economic activity means reduced demand for construction materials, automotive, machinery and appliances, and overall lower manufacturing orders. Plant closures both full and partial are expected to continue into the coming months. The likely massive decline in construction spending worldwide paints a grimmer picture for steel industry. With consumers not seen as likely to spend on new homes anytime soon, construction demand will decline impacting profitability and revenues of steel manufacturers. With the automotive industry collapsing under the lockdowns and government curbs, automotive manufacturing is set to receive the worst ever setback sending knock-on effects across the upstream supply chain. Without government intervention and financial support, several automotive companies in developed and developing countries are expected to file for bankruptcies. Furthermore, enterprise spending on machinery and equipment will remain sluggish in the near term. As capital and corporate cost budgets are revised based on dwindling new orders and, falling plant capacity utilization rates, spending on plant upgrades will be delayed. Asset strategies, for instance, will be impacted as budgets for equipment upgrades and new equipment purchases will be either repurposed or cancelled to manage the financial pressure posed by the current economic climate, while reducing the overall demand for machinery and equipment, thus putting further pressure on steel companies catering to these segments. The overall scenario for the steel scrap market remains largely lackluster in the short-term. Social distancing norms are being strictly implemented with steel firms under pressure to reduce worker density in factories. This will require proactive investments in automation technologies such as collaborative robotics, 3D manufacturing, autonomous materials movement, and industrial internet of things (IIoT). However, access to financial resources and maintaining cash-flow liquidity will remain key challenges for steel firms during this period.

In the post COVID-19 period, growth will come from renewed focus on shed on migration towards steelmaking technologies that rely heavily on steel scrap such as Electric Arc Furnaces (EAF) and blast oxygen furnaces (BOFs). The market will richly benefit from recovering investments in scrap metal extraction equipment; development of recycling technologies that offer higher recycled yield; and growth in digitization across the supply chain which enables flexible material flow and improved efficiency of inventory management. Asia-Pacific will remain a major market driven by post COVID-19 increase in demand for steel produced by sustainable practices; and enforcement of tighter environmental regulations that exert pressure on manufacturers to reduce emissions. With countries such as China and India reaching advanced stages of industrialization, availability of post-consumer scrap willincrease and create an environmental burden that requires sustainable resolution. The focus in these countries will therefore shifting towards steel reuse and reduction of CO2 footprint of the domestic steelmaking industries. In China specifically, rapid Increase in the number of end-of-life vehicles (ELV) in countries such as China will pushup the volume of steel scrap and also the pressure on OEMs to use recycled steel scrap in automobile production. Strict CO2 emission norms for manufacturing industries worldwide will drive focus on converting metal scrap into vital secondary raw material. In addition, innovation in metal extraction technologies and processes will benefit market growth further.