A permanent high demand in scrap is explained by the peculiarities of steelmaking technology. The production of steel in open-hearth furnaces, basic oxygen or electric furnaces requires blending scrap with cast iron; and the higher the steel grade, the greater amount of scrap is required.
The collection and processing of ferrous metals naturally became a separate branch of steel industry, and the high scrap metal prices are explained not only by the increase in steel, but also by the depletion of conventional ferrous scrap sources.
The utilisation of scrap metal is a complicated process, as ferrous scrap production attracts attention of not only large corporations, finding themselves on top buyer positions, but also of small businesses. Therefore, when a scrap metal dealer purchases scrap metal from small enterprises, it leads to an increase of the share of low metal category in the total weight of recyclables. In turn, the load on the press equipment leads to their accelerated wear and excessive energy consumption. In addition, the rising prices for fuel and lubricants increase the cost of delivery, which results in more significant expenses. Purchasing ferrous scrap from industrial enterprises is not always characterised by high level involvement by owners in the implementation of rhythmic deliveries.
Despite all the difficulties and current market stagnation in various regions, scrap metal industry will keep on functioning as long as metallurgical industry will exist. The collection and processing of scrap is an obligatory link in the technological chain of steel production. Another strong argument in support of such an optimistic focus is still a way more competitive price of scrap metal in comparison with raw natural resources.