Macquarie Group commodities strategy head Marcus Garvey says the build-out of renewable energy infrastructure should be the major contributor to additional steel demand.
At Tuesday’s Singapore Green Steel Forum attended by Kallanish, Garvey said he expects global solar capacity additions to approach 800 GW/year by 2030, and wind capacity additions to reach 200 GW/y.
Meanwhile, electric vehicle sales (battery electric + plug-in hybrids) are forecast to reach about 45% of light vehicle market penetration by 2030. Uncertainty around material selection however means this is not a clear-cut positive for steel demand.
In the context of about 1.9 billion tonnes/year of global steel production, he expects renewable infrastructure steel demand to reach about 45 million tonnes/year at current intensity levels.
While the growth is not dramatic, Garvey pointed out that in the context of annual demand growth, it could be a material increment.
He noted the energy transition should also see ex-China pull its weight more, after only accounting for about 26% of global steel demand growth since 2010.
He also added that boosting electric arc furnace production remains challenging, with scrap collection, logistics, and quality challenges – such as impurity removal – needing to be managed.
Relatively new blast furnaces are also unlikely to be replaced in the short term.
While direct reduced iron is planned to feed EAFs, he warned that this raises the knock-on question of where pellet supply will come from.
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