The key raw materials needed in steelmaking include iron ore, coal, limestone and recycled steel.

The two main steel production routes and their related inputs are:

Route 1: The integrated steelmaking route, based on the blast furnace (BF) and basic oxygen furnace (BOF), uses raw materials, including iron ore, coal, limestone and recycled steel. On average, this route uses 1,370 kg of iron ore, 780 kg of metallurgical coal, 270 kg of limestone, and 125 kg of recycled steel to produce 1,000 kg of crude steel.

Route 2: The electric arc furnace (EAF) route uses primarily recycled steels and direct reduced iron (DRI) or hot metal, and electricity. On average, the recycled steel-EAF route uses 710 kg of recycled steel, 586 kg of iron ore, 150 kg of coal, 88 kg of limestone and 2.3 GJ of electricity, to produce 1,000 kg of crude steel.

Around 70% of total global steel production comes from the BF/BOF route. Global EAF output accounts for about 30% of global steel production.

Iron ore and metallurgical coal are used mainly in the blast furnace process of ironmaking. For this process, coking coal is turned into coke, an almost pure form of carbon, which is used as the main fuel and reductant in a blast furnace.

Typically, it takes 1.6 tonnes of iron ore and around 450kg of coke to produce a tonne of pig iron, the raw iron that comes out of a blast furnace. Some of the coke can be replaced by injecting pulverised coal into the blast furnace.

Iron is a common mineral on the earth’s surface. Most iron ore is extracted in opencast mines in Australia and Brazil, carried to dedicated ports by rail, and shipped to steel plants in Asia and Europe.

Steel is an alloy consisting primarily of iron and less than 2% carbon. Iron ore is, therefore, essential for steel production and maintaining a strong industrial base. 98% of mined iron ore is used to make steel.

Iron is one of the most abundant metallic elements. Its oxides, or ores, make up about 5% of the earth’s crust. The average iron content for high-grade ores is 60% to 65% after taking into account other naturally occurring impurities.

Iron ore is mined in about 50 countries. Most iron ore is mined in Australia, Brazil, China, India, the US and Russia. Australia and Brazil dominate the world’s iron ore exports, each having about one-third of total exports.

Worldwide, iron ore resources are estimated to exceed 800 billion tonnes of crude ore, containing more than 230 billion tonnes of iron.

In thousand tonnes

In thousand tonnes

Source of iron ore production and export data:  Steel Statistical Yearbook 2024, worldsteel, subscription

Coking coal is a key raw material in steel production. As iron occurs only as iron oxides in the earth’s crust, the ores must be converted, or ‘reduced’, using carbon. The primary source of this carbon is coking coal. Coke, made by carburising coking coal (i.e. heating in the absence of oxygen at high temperatures), is the primary reducing agent of iron ore. Coke reduces iron ore to molten iron saturated with carbon, known as hot metal.

It is estimated that around 1 billion tonnes of metallurgical coal are used in global steel production, accounting for around 15% of total coal consumption worldwide.

Coal reserves are available in almost every country worldwide, with recoverable reserves in around 80 countries. Although the biggest reserves are in the US, China, Russia, Australia and India, coal is actively mined in more than 70 countries^.

China is by far the biggest producer of coking coal in the world.

Australia dominates metallurgical coal exports, accounting for about 200 million tonnes of a total of 310 million tonnes of metallurgical coal exports globally.

It is estimated that about 30% of coal can be saved by injecting fine coal particles into the blast furnace, a technology called Pulverised Coal Injection (PCI). One tonne of PCI coal used for steel production displaces about 1.4 tonnes of coking coal. Coals used for pulverised coal injection into blast furnaces have more narrowly defined qualities than steam coal used in electricity generation.

While the term ‘scrap’ may lead one to believe this is a waste product, it is actually a valuable raw material used in every steelmaking process. Due to its inherent magnetism, steel is very easy to separate and recycle, making steel the most recycled material in the world.

At the end of a product’s life, steel’s 100% recyclability ensures that the resources invested in its production are not lost and can be infinitely reused. Melting steel scrap at the end of its useful life allows us to create new steels, making adjustments to their chemistry and the shape of the new products.

Maximising scrap use helps reduce CO2 emissions

Steel scrap is vital to the steel industry and plays a key role in reducing CO₂ emissions, conserving resources and energy, and driving the economics of the industry.

All steel production uses scrap as part of its raw material mix, up to 100% in the electric arc furnace (EAF) and up to 30% in the blast furnace (BF) route. Therefore, every steel plant is also a recycling plant.

Maximising the use of scrap leads to an overall reduction in CO₂ emissions. Our life cycle inventory (LCI) calculations show that every tonne of scrap used for steel production avoids the emission of 1.5 tonnes of CO2 and the consumption of 1.4 tonnes of iron ore, 740 kg of coal, and 120 kg of limestone.

While some nations already have well-established scrap supply chains and can meet most of their steel demand through the use of scrap, this is not the case everywhere. In many countries where steel production and use is still expanding, scrap availability remains low and supply chains still need developing.

In reality, there simply isn’t enough scrap to satisfy global steel demand.

While end-of-life scrap availability is expected to grow significantly in the next decades, this additional availability will still not be enough to meet global demand.

As a result, the production of steel from iron ore will likely continue to account for more than half of global steel production.

All scrap that is collected is recycled, and the current recycling rate is estimated at about 85%. This high level of recycling means that there is limited room for improvement. While iron ore supply can flex with demand, global scrap availability is a function of historic steel production, ease of recovery and the lifetime of steel products is estimated to be 40 years on average, but can vary from a few weeks, in the case of packaging, to 200 years or more, in the case of buildings. A functioning, healthy international scrap market ensures that each tonne of scrap is used where it provides the greatest benefit.

worldsteel estimates that obsolete scrap availability will grow by about 500 million tons over the next three decades. While these are good prospects, there are still significant challenges. The growth in scrap availability will be concentrated mainly in developing parts of the world; hence, the timely development of scrap collection and separation infrastructure in these countries will be crucial in bringing the increasing availability of scrap supply to the steel industry.

There is also significant value in improving scrap sorting processes: a key scrap quality parameter for steelmaking is the content of residual metallic content, such as copper, tin, etc.

Different steel grades will have different tolerance thresholds for such metals, the most demanding being flat products such as automotive sheets.

In such products, even small amounts of these tramp elements can cause surface cracking during hot-rolling, forming, and stamping.

 While more challenging, these products can still be produced in EAFs if scrap with a significantly low degree of impurity is available. Even so, the addition of ore-based metallics, such as DRI, is necessary to further dilute trace levels of metallic elements. On the other hand, steel scrap containing chrome, nickel and other alloys is valuable for stainless steel production, since these alloying elements are needed for corrosion resistance and other desirable properties. Sorting and directing such high-alloy scraps to stainless steel production instead of carbon steel facilities also reduces the need for primary alloys.

This highlights the need for an active, dynamic global industry for scrap collection, sorting, and use.

As governments around the world strive to meet their climate mitigation targets, some — particularly in more mature economies — are considering measures to retain scrap domestically. While others, largely in developing economies, strongly oppose such restrictions, the potential for diverging national policies is growing. In this context, it is important that policy frameworks support the use of scrap in ways that maximise its contribution to global decarbonisation goals.

The steel industry will continue to increase its use of scrap steel, and the share of electric arc furnaces in global steelmaking will continue to grow over the coming decades.

Steelmaking materials are some of the world’s most significant commodities in terms of volume of production, consumption, and transportation. For example, iron ore, with a production volume of around 2.3 billion tonnes and an export volume of about 1.6 billion tonnes, is the third-largest commodity by production volume – after crude oil and coal – and the second-most-traded commodity – after crude oil.

Globally, ferrous scrap, with a recycling volume of more than 800 Mt, is the world’s most extensive commodity recycling activity.

Notes:

• Scrap consumption: This global scrap consumption figure is an estimate based on assumed crude steel production, the share of different routes for steelmaking in total crude steel production, and raw materials charge rates. Hence, it is subject to a higher level of uncertainty and margin of error than some other statistics that we report, such as crude steel production and iron ore consumption, as these statistics are based on reports collected from national steel producers’ associations and customs offices.
• Scrap availability (end-of-life scrap availability, also known as obsolete scrap availability):  These estimates come from our scrap availability estimation work, which models the lifecycles of steel containing goods and structures such as buildings and automobiles. Modelling product lifecycles is quite a data and assumption-intensive work that requires information such as the average steel content of the goods, average useful lifetimes and recovery rates. Our approach does not consider the potential impact of certain policies, such as auto scrappage schemes and scrap prices, the discarding of steel-containing goods or collection and recycling activities. Hence, there can be wide discrepancies between the scrap availability estimate for a certain year and the actual amount of scrap that is recycled in that year. Nevertheless, we believe that our scrap availability estimates should give a reasonable view of how scrap supply might be expected to change in time, especially over the medium term.