Having undergone a recent phase of globalisation and restructuring in the backdrop of the global crisis, the market for ferrous slag is projected to reach almost $28 billion by 2020, according to a new study by Smithers Apex in association with PRo Publications.
Despite a fall in the overall levels in 2009, total slag availability is expected to increase in China and other BRIC countries over the next five years till 2014, with China alone producing more than half of all slag. Europe, North America and Japan are also forecast to witness a gradual increase in slag availability over the same period.
Based on primary research and expert analysis, The Future of Ferrous Slag - Market Forecasts to 2020 offers an insight into the major trends and drivers impacting the ferrous slag market, breaking it down by slag types and key user sector, with quantitative forecasts till 2020 (volume and value).
The study also examines the trading of slag and aggregates and projects slag supply and consumption data by end-use in the major slag producing countries. Importantly, the study also analyses the complex and changing regulatory framework governing the marketing of slag, offers technology forecasts, and provides a detailed overview of the industry structure and the strategies of the leading players in each of the main regions of the world.
The study essentially focuses on ferrous slag, which includes blastfurnace slag and various types of
steel slag, arising from the iron and steel industry worldwide. With changes taking place in the geographical location and the structure of the iron and steel industry, the study predicts future demand for ferrous slag will be driven by low-carbon and other environmental policies. Significantly, ferrous slag could increasingly be perceived as a material in limited supply, and not a by-product to be disposed of.
Evaluating the outcome of increasing demand and restricted supply in the ferrous slag industry, Smithers Apex explains that significant changes have been made in the environmental legislation and the economics of the carbon market. This has affected the cost and competitiveness of the cement and aggregates industries, the main users of ferrous slag. Smithers Apex expects these changes to increase the demand for, and the value of slag, also possibly leading to more blastfurnace closures, and reducing the supply of granulated blastfurnace slag (GGBS) in industrial countries with tight emissions controls.
Metallurgical slags have a very wide range of potential uses, based on their varying physical and chemical properties. Increasingly, the impact of environmental legislation and energy costs on the cost of producing cement clinker and on the cost of quarrying aggregates have made cement the most economically viable use for slag, wherever the cementitious qualities of the slag and the local technical regulations on cement and concrete allow it. Where they do not, the slag is used in high-value aggregate applications, particularly where the friction and polished stone value (PSV- a measure of resistance of road surface stone to skidding) of slag add value. Environmental issues also boost slag demand in high-quality aggregate applications.
According to the study, the potential demand for slag in both cement and aggregates far outstrips supply, i.e. the total supply of blastfurnace slag is 13% of world cement production. GGBS has commanded prices in the range of $50-$80/tonne in 2009, and this will increase with the emissions premium. Slag available for aggregates is less than 1% of the world aggregate market, and it commands prices generally in the range of $5-$50/tonne (with most contract prices at the low end of this spectrum).
With regard to the regulatory framework governing ferrous slag, Smithers Apex asserts that Europe is leading a revolution in legislation and technical regulations on construction and construction products, and also on environment and waste.
The key regulatory issues in Europe are as follows:
- The emissions trading system EU-ETS;
- The Waste Framework Directive, revised 2008 (2008/98/EC of 19 November 2008);
- The Construction Products Directive (CPD 89/106/EC); expected to be superseded by a new Construction Products Regulation;
- Eurocodes for construction;
- REACH regulation on chemical substances;
- The (non-harmonised) concrete standard EN206, and various supplementary national concrete standards;
- The harmonised standards for cement, aggregates and GGBS;
- Public procurement directives;
- Landfill taxes, aggregates taxes, quarrying taxes and licensing.
The study also analyses the technology changes impacting the ferrous slag market. Despite the mature, traditional nature of slag processing and the main slag uses, constantly evolving steel technology is affecting the supply of slag, with increasing steel slag and stagnant or decreasing blastfurnace slag. Progressive improvements in equipment to reduce wear and tear and energy consumption are also affecting the slag industry. Quality-control procedures are also steadily improving to meet new standards and increase the marketability of slag in niche, high-value uses.
Highlighting region-wise slag supply, Smithers Apex states that in 2009 outside China, blastfurnace and steel slag production is expected to have been lower by around 15% (blastfurnace slag) and 10% (steel slag) compared to 2008 figures, which was also lower than 2007 estimates. Smithers Apex also forecasts that blastfurnace and steel slag production will not return to 2008 levels until after 2013. The study goes on to add that even though China produces 60% of the world's blastfurnace slag and 40% of the steel slag, most of this is not being utilised currently. While in the rest of the world, supply is declining, in China it is increasing, with the nation rapidly increasing its rate of granulation and utilisation to keep pace with future needs.
In trading circles as well, slag is not traded in very great quantities, except across land borders (US-Canada, Benelux-France-Germany). Smithers Apex believes that even though Japan is the main exporter, its exports will soon become negligible, since the new government in 2009 has advocated a policy of reducing carbon emissions, with the cement and construction industries researching slag applications in new construction methods. On the other hand, China's exports may increase, but it is also expected to increase its domestic usage over time.
The Future of Ferrous Slag - Market Forecasts to 2020 is available now. For further information please contact Bill Allen on +44 (0)1372 802086 or via e-mail firstname.lastname@example.org.