OECD Workshop on Steelmaking Raw Materials
OECD Conference Centre, Paris, 5 December 2011
Developments in steelmaking raw material markets are receiving increasing attention by governments and industry alike. Strong demand for key steelmaking raw materials – notably iron ore, coal/coke and ferrous scrap – as well as national raw material strategies, trade policy and regulatory issues have raised concerns about the availability of supply to meet the demands of the global steel industry, as well as the impact of the resulting rising costs and price distortions between markets. Producers of raw materials are making significant efforts to raise production by investing in additional capacities, but there is a significant time lag between the decision to expand operations and the eventual production. Furthermore, such efforts are often challenged by regulatory, environmental and trade policy issues. Restrictive trade policies, such as export quotas, taxes and licensing schemes, applied to minerals and metal products appear to have become more frequent, causing concern in countries that rely on imports of raw materials for their steel industries.
The purpose of the Workshop was to bring together policy makers, raw material producers and steel industry representatives to exchange information on raw material market developments and problems pertaining to the availability of raw materials. While strictly observing competition legislation, participants are expected to take stock of industry strategies and governmental policies with respect to availability of raw materials.
Outcomes of the workshop
Delegates were informed by industry associations that in spite of temporary scarcity of raw materials, there are sufficient worldwide reserves to satisfy future demand. The workshop emphasised the growing role of China, India and other emerging economies in global demand for raw materials such as iron ore. Many projects are being developed around the world to meet this demand, though many new iron ore mining projects are often either in difficult environments, which require substantial infrastructure development, or correspond to low quality deposits.
Ferrous scrap reserves are mainly in developed economies. Steelmakers in emerging economies continue to be relatively more active in integrated steelmaking rather than electric arc furnace production. As a consequence, the demand for coking coal will continue to rise especially for higher quality hard coking coal. One of the challenges for steelmakers will be to optimise their mix of raw materials given their supply choices in terms of quality, geography and price.
On the policy side, export restraints applied to minerals and metal products have become more frequent, causing concern in countries that rely on imports of raw materials for their steel industries. The discussion in the workshop showed that nearly all countries are dependent on others for some raw materials, highlighting the mutual interest in policy approaches to support open markets for raw materials.
The workshop was organised in three sessions:
Session 1. Global steel market developments and raw material resources: an overview
a) The OECD’s Economic Outlook and introduction to key steel market developments
b) The geography of steel making raw materials - policy implications.
Session 2. Recent developments in steelmaking raw material markets and the short-term outlook
a) A broad overview of the key market and policy issues pertaining to raw materials. The report will emphasise production, demand and trade.
b) Short reports on the iron ore, coking coal, scrap, and steelmaking metallic markets
c) Mining associations, individual mining companies and scrap suppliers views on market developments in their industries.
Session 3. Ensuring sufficient and steady supplies of steelmaking raw materials: industry and governmental raw material strategies.
a) Export restrictions on raw materials: the case of steel
b) The overview presentation will be followed by short interventions by government representatives on their raw material policies. To address the challenges faced by industry in achieving a secure and reliable supply of raw materials, many governments have recently revisited their raw material policies. Government officials from major importing and exporting countries will be invited to inform participants about the policies they pursue to address raw material supply and demand. In particular, they are requested to inform the Workshop about actual actions they are taking or plan to take in co-operation with exporting countries to increase sustainable access to raw materials for the benefit of all parties involved and transparency in measures taken for resource development and other policy goals.
c) Steel and raw material industry associations will be invited to inform participants about how they are impacted by the volatility of raw material markets and their strategies to overcome these challenges.
The 71st session of the OECD Steel Committee took place following the workshop. Presentations made during that meeting can be found below:
World steel market developments and outlook
Global overview by the OECD Secretariat
worldsteel short-range Outlook
Brief supplemental reports by regional steel associations
Steel trade and trade policies
Steel and climate change – carbon capture and storage issues
Please find attached a copy of the Chairman's Statement .