German zinc recycler Befesa expands in China
21/12/2021 10:13
* Befesa to build more recycling plants in China
* Expects 30% of China's steel to come from scrap in 5 yrs
By Pratima Desai
LONDON, Dec 21 (Reuters) - Befesa is expanding its footprint
in China, where steel recycling is expected to rise to help meet
national carbon emissions targets, creating an opportunity for
the German recycler to recover zinc from steel waste.
Zinc is used to galvanise steel, now mostly produced in
China using blast furnaces, though the government is asking
mills to make greater use of electric arc furnaces (EAFs), which
typically use scrap steel.
Electric arc furnaces produce a dust classified as hazardous
waste that cannot be disposed of in landfills, but which Befesa
collects for a fee and recycles to recover zinc in France,
Germany, Spain, South Korea, Turkey and the United States.
"Our first plant in China started operating in November, the
second will be in operation in three to four months," Befesa
Chief Executive Javier Molina told Reuters.
"Today only 10% of the steel produced in China comes from
scrap processed in EAFs. In five years, we expect 30% of China's
steel will come from scrap. We will build more plants in China
over the next four to five years."
China plans to boost its use of steel scrap by 23% to 320
million tonnes by 2025, to help meet its target of reaching a
peak in greenhouse gas emissions before 2030 and becoming
"carbon neutral" by 2060. urn:newsml:reuters.com:*:nL2N2OJ05O
Molina said 70% of steel produced in the United States comes
from scrap processed in EAFs, while in Europe the figure is more
than 40%.
Befesa produces about 300,000 tonnes of zinc a year at a
cost below $1,000 a tonne, to bring in 80% of its earnings.
"We hedge 70% of our zinc production, usually three years
ahead," Molina said, adding that Europe's power crisis had added
to its costs. "But higher commodity prices this year have helped
offset energy cost inflation."
Benchmark zinc prices CMZN3 of about $3,400 a tonne on the
London Metal Exchange are up about 23% this year after climbing
21% last year.
Befesa also produces aluminium from aluminium salt slag for
less than $1,000 a tonne.
Aluminium prices CMAL3 are trading at about $2,700 a
tonne, off their 13-year high of $3,229 a tonne in October.
(Reporting by Pratima Desai; Additional reporting by Min Zhang
in Beijing; Editing by Clarence Fernandez)
((pratima.desai@thomsonreuters.com; +44 207 513 5681;))