Germany’s steel recycling industry is currently overshadowed by pessimism, with insiders predicting a challenging landscape for 2025. A recent survey shared during the annual conference of the German Steel Recyclers Confederation in Munich reveals that a staggering two-thirds of industry participants expect the business climate to worsen. Only 2% of respondents foresee any improvement, prompting serious concerns about the sector's future viability.
Investment intentions have plummeted, with only 15% of companies planning to increase spending, down from 28% the previous year. A significant portion, around one-third, is contemplating cuts to their investment plans, attributing this reduction largely to bureaucratic obstacles that delay project approvals. This stagnation is particularly troubling for initiatives focused on reducing CO₂ emissions, which are critical for aligning with European climate goals.
Operational challenges compound the industry's struggles. The rising cost of transportation, coupled with a shortage of truck drivers, is creating a bottleneck in the supply chain. Additionally, material flows have decreased, further complicating the situation. A particularly alarming trend is the increase in battery-related fires; half of the companies surveyed reported experiencing at least one fire in the past five years due to improperly disposed lithium-ion batteries. These incidents not only pose safety risks but also disrupt operations.
Despite the stagnation in the German economy since 2022, there has been a slight uptick in demand for scrap steel, driven by a 4% increase in crude steel production in the first eight months of 2024. However, the supply remains tight, primarily due to declines in both old scrap from the construction sector and new scrap from production waste. While steel manufacturers are cautiously ramping up output for infrastructure projects, the overall supply-demand equilibrium remains fragile and precarious.
To address these challenges, a new study from the Fraunhofer Institute for Material Flow and Logistics emphasizes the need to modernize scrap logistics. The study proposes enhanced coordination and digitalization in transport, introducing models such as a "steel recycling hub" and "self-managed logistics using combined transport." These strategies aim to improve efficiency, utilizing full trains and modular systems to optimize operations.
BDSV advocates for shorter turnaround times for rail freight and modular solutions to enhance transport efficiency. The association is also promoting a shift from road to rail for scrap transport, which could significantly reduce CO₂ emissions and bolster sustainability in the sector. Furthermore, BDSV and industry stakeholders are urging the establishment of a "fast lane" to expedite the approval process for CO₂-saving projects. Current approval times can extend beyond two years, which many view as detrimental to the sector’s competitiveness and innovation.
To secure the long-term viability of Germany’s steel recycling industry, the BDSV is calling for competitive electricity prices and financial backing for new technologies. These measures are deemed essential for driving sustainable practices and ensuring that the sector can contribute effectively to the EU’s climate objectives while overcoming the myriad challenges it faces.
