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    In the time and age where environmental concerns are growing, waste management holds immense importance. In this regard, steel scrap can be well managed with recycling. In fact, steel is one of the most recycled materials in the world. A media report suggests that approximately 630 million tonnes of steel scrap is recycled annually. Such a huge volume of recycling reduces carbon dioxide (CO2) emissions by 950 million tonnes annually. Around 40% of steel made is from recycled steel.

    The government of India too is emphasising on steel recycling and has introduced the Steel Scrap Recycling Policy in 2019. This policy promotes 6Rs principles of waste management – Reduce, Reuse, Recycle, Recover, Redesign and Remanufacture in order to minimise emission of greenhouse gases (GHG).

    In our previous article we have explained the manufacturing process of steel. In this article we will explain why recycling steel is necessary, types of steel recyclables, benefits of steel recycling and the process.

    Basics of steel recycling

    Many may ask if steel is a recyclable material. The answer is yes. Steel can be 100% recycled. Meaning when steel is recycled, one can achieve the same material of the same quality. It does not lose quality when recycled like other materials.

    The process of steel recycling begins with collecting and sorting waste steel. Then, it is sent to foundries or recycling plants where the actual recycling process takes place.

    In the next sections we will take a look at how steel scrap is collected followed by the end-to-end steel recycling process explained in detail.

    How is steel scrap collected?

    As mentioned before, the process of recycling starts with the collection of scrap steel. Types of recyclables and sources are mentioned below:

    • In-house scrap: It is steel scrap produced in the steel production plant such as trimmings and other rejected scrap. This is collected and is usually sent back to the furnace of the same plant.
    • Industrial scrap: Industrial scrap steel is produced in other factories where steel is used raw material. For example, steel as a raw material in automotive or kitchen appliances manufacturing plant usually has steel scrap. This scrap is collected and sent to the recycling plants.
    • Other sources of steel scrap: Other areas where steel scrap is produced include households. Examples of household steel scrap are old appliances, old cars to be sent to the scrapyards, etc. Sometimes, scrap steel is also recovered from offices. Moreover, the role of steel in construction is undebatable. Hence, old buildings and structures become another source of scrap steel. When old buildings are demolished, steel and other materials are recovered and sold to recyclers. Steel from these sources is not in uniform quality and the need to be sorted. For example, steel recovered from old cars is different than steel from old appliances. Also, it can be steel or stainless steel too.

    Process of steel recycling

    Below is the step-by-step process of steel recycling.

    • Sorting: Once the steel is collected by the recyclers, it is sorted because not all kinds of steel have the same melting point. For example, the melting point of stainless steel is about 2500-2800°C while steel melts at around 2200-2500° Moreover, the worth of recycled steel and stainless steel is different in the market. Stainless steel is sold at a much higher value than steel, as a result, sorting becomes an important step for recyclers.
    • Melting: Once the steel is sorted, it is melted down in a furnace. Depending upon the kind of steel being meltdown, the temperature varies. However, the furnace that melts down the steel runs at around 3000° This process also eliminates the possibility of any contamination.
    • Solidifying: Once the steel is melted completely and impurities and contamination are eliminated, it is solidified and reshaped in steel sheets. And then it is left to cool down.
    • Back to production: Once the steel is solidified into sheets and cooled, it is brought back to the market and steel sheets are sold as a raw material.

    How much scrap is produced in India?

    According to a media report, in February 2023, Union Steel Minister Jyotiraditya Scindia said that India produced steel scrap worth 25 million tonnes in the last eight years and bought 5 million tonne of steel scrap. He further mentioned that the Ministry of Steel is encouraging primary steel producers to use 50% of their input from recycled steel by 2047. This is being done to promote a circular economy.

    In alignment with this effort, Tata Steel, a leading steel company in India, has established a steel recycling plant with a capacity of 0.5 MT in Haryana.

    Why is recycling steel beneficial?

    Growing environmental concern is the top reason why steel is recycled. Here are some of the prominent causes why it is beneficial to recycle steel.

    • Reducing demand for landfill sites: Need for landfill areas for dumping waste is increasing each year. It is believed that India will soon need a landfill size of a city as a landfill site. If steel scrap is recycled, it is not dumped in landfill areas. Moreover, landfill areas lead to pollution of air, water and land. That means the lesser scrap in the landfill, lesser the area of landfill and lesser the pollution.
    • Reusing and recycling save environment: Iron ore is the key material in steel manufacturing, which is excavated from land mines. Land mining is not only polluting but also hazardous activity. More the recycled material is used, the lesser the need for excavation. Therefore, it is environmentally friendly to recycle steel.
    • Curbing energy consumption: Producing steel by recycling method is more energy efficient than producing it through raw material. It is said that the energy required to produce a single steel tin from virgin steel is the same as the energy that is required to produce 20 tins from recycled steel.
    • Recycling helps the economy to grow: More recycling translates into more opportunities for recyclers and accordingly it creates job opportunities for scrap collectors, recyclers and allied businesses. As a result, it is beneficial for the economy.
    • Reduction in steel cost: The price of steel in India has been witnessing an upward trends since the last two years. Since the energy requirement is lesser, the cost of energy is also lesser. This benefit can further be passed on to customers by reducing the cost of recycled steel.

    Concluding remarks: Is recycling steel a profitable business?

    Although the government is promoting recycling for environmental benefits, the main question is if recycling steel is a sustainable business.

    The short answer is yes. However, profit margin depends on various aspects such as if you buy scrap or get it for free, etc. Experts believe that the period of getting a return on investment (ROI) is about one year. But depending on the infrastructure, sources of raw material, etc., the period of ROI may vary. Hence, it is extremely important to have the right plan before investing in the recycling business.

    Swati Deshpande

    Swati is a passionate content writer with more than 10 years of experience crafting content for the business and manufacturing sectors, and helping MSMEs (Micro, Small and Medium Enterprises) navigate complexities in steel procurement, and business services. Her clear and informative writing empowers MSMEs to make informed decisions and thrive in the competitive landscape.