Outokumpu uses recycled stainless scrap in order to save virgin raw materials and produce stainless steel cost-efficiently. Customers appreciate knowing that the material contains as little virgin raw materials as possible. To achieve best results, Outokumpu cooperates closely and actively with its suppliers.
Outokumpu has always been focused on the use of recycled stainless scrap: it is the most sustainable, efficient and cost-effective method of making stainless steel. Throughout the Group, Outokumpu purchases approximately 90,000 thousand tonnes of scrap per month. Outokumpu’s stainless steel has the highest share of recycled content in the market – as high as 87%. Using recycled material also reduces the amount of surplus steel scrap in nature, giving it a new life.
“Through our network of supply partners in Europe, USA and elsewhere, we can ensure the best supply to all the mills possible, while ensuring the most cost-effective mix,” says Tim McNally from stainless scrap procurement at Outokumpu.
Closing the loop on stainless steel
The scrap suppliers Outokumpu uses are selected based on their past experience and their ability to provide a quality product. According to McNally, a good supplier has the ability to go beyond what is necessary in order to help Outokumpu meet the ever changing needs of customers. Outokumpu communicates regularly with suppliers to make sure that they meet the required standards. One of the companies that Outokumpu uses as stainless scrap suppliers is ELG, a specialist in trading and recycling raw materials, especially for the stainless steel industry. ELG has been Outokumpu’s long‐term partner and a key source of secondary raw materials for stainless steel production.
“ELG deals with raw materials that are mainly the result of urban mining, such as various types of man‐made scrap, which can be used and reused endlessly. We reduce the stream of metal waste, turn it back into raw material, and enable our customers to turn them into new products,” says Benno Kratz, Group Marketing Officer from ELG. The materials are collected at ELG yards worldwide, processed to customers’ specifications, and sold to steel mills, letting them become an active part of the recycling cycle once again.
Increasing interest to the whole supply chain
Using recycled stainless steel produces far less waste and uses much less energy than doing so with virgin materials. This has an immediate effect of reducing cost due to energy prices as well as carbon and landfill taxes. “The benefits vary significantly from a few percent to double digit percentages of the total cost of the raw material input. As raw material costs are between 60–70% of the total cost of the final product this affects the profitability of the company and its competitiveness to the customer,” McNally says.
Scrap also contributes to Outokumpu’s efforts in reducing its global footprint on the environment – which is what customers are also getting increasingly interested in. Using recycled stainless steel produces a finished product with a significantly low environmental footprint and value beyond a single product’s lifetime. The use of secondary raw materials helps to keep CO2 emissions down and preserves a great amount of natural resources that are used to produce new metal. “More and more of our customers’ customers are requiring that the supply chain be as green as possible and keep waste to an absolute minimum. The aim of Outokumpu is to use recycled stainless scrap in its processes as much as possible in order to save resources for the generations to come.”
By working closely with service providers and scrap suppliers, Outokumpu constantly explores ways in which stainless scrap can be used to better serve customers. At the moment, there are various projects that aim to either increase the use of stainless scrap or to make it more cost-effective.