Iron scraps turn golden !? December 7, 18:28
An employee of a trading company tweeted:
"Iron scraps have become
something
like" gold "."
Iron scraps such as scraps that are indispensable at manufacturing sites.
However, it is said that it is difficult to obtain it due to the sudden rise in prices.
The factor was "that problem" that was inseparable from our lives.
(Yosuke Nakano, Reporter, Ministry of Economic Affairs)
“Iron scrap” soars to record
It was when I visited a machine tool maker in Shizuoka prefecture last month that I noticed the "abnormality" that was occurring at the manufacturing site.
When I asked about the impact of the global semiconductor shortage, I got a surprising word.
"I'm running out of semiconductors, but I can't get" castings "now ..."
A "casting" is a metal part that is made by melting metal, pouring it into a mold, and cooling it to harden it.
It is an indispensable part for manufacturing, which is the foundation of all products such as automobiles and home appliances.
The main raw material for this is "iron scrap" such as scrap and scraps from iron processing.
Japan is not blessed with natural resources, but scrap and other "iron scraps" should be valuable resources that Japan, an industrial powerhouse, can secure without being affected by other countries.
However, when I visited the foundry manufacturing company of the manufacturer's business partner, I was faced with a soaring price of scrap iron that I had never experienced before.
President Takemura
"What I bought last year at the 30 yen level per kilo, but now it has risen to the 70 yen level. Our company has been in business for 110 years, but I have never experienced such a sharp rise in price. "
Changes in the average price of iron scrap traded in the three areas of Kanto, Chubu, and Kansai.
The price per ton was 18,500 yen in April last year when the infection of the new corona began to spread, but it was 56,300 yen in October.
The price has actually increased more than three times.
Iron scrap is "green material"
Why is the price of scrap iron soaring?
As I proceeded with the interview, I found that the background was the global accelerating tide.
It is "decarbonization".
At the United Nations Conference on Climate Change Countermeasures "COP26" held in the United Kingdom until last month, a result document was adopted that pursued efforts to limit the rise in global average temperature to 1.5 degrees Celsius.
We have set a goal of carbon neutrality (effectively zero greenhouse gas emissions) so that countries around the world can compete.
Under these circumstances, the "steel industry" is particularly urgently needed.
The amount of carbon dioxide emitted from the steel industry accounts for 14% of the total country.
Iron is generally produced in a "blast furnace" by mixing iron ore and coal-derived coke and melting it, but this method produces a large amount of carbon dioxide.
Therefore, "electric furnace" is attracting attention.
It is a manufacturing method that melts "iron scrap" with the heat of electricity and reuses it. It is said that this can reduce carbon dioxide emitted during iron manufacturing by up to 70%.
As the decarbonization movement accelerated, scrap iron became a limelight as a so-called “green material”.
China steers to "electric furnace shift"
Major steel makers in Japan are also embarking on the reuse of scrap iron one after another, but China is at the forefront of this “electric furnace shift”.
China's President Xi Jinping declared at the UN General Assembly last September, "We will strive to achieve virtually zero carbon dioxide emissions by 2060."
To that end, we have set a goal of doubling the ratio of steel production in "electric furnaces".
For this reason, China, which required a large amount of scrap iron, could not procure it domestically alone, but began to buy it from overseas as well.
In particular, demand for Japanese iron scrap, which is considered to be of good quality and cheap, has increased sharply.
The export volume of "iron scrap" from Japan to China was more than 16,000 tons last year, but this has already increased to about 370,000 tons, a 23-fold increase.
President Takemura
"China is working hard to decarbonize as the Beijing Olympics are approaching. Under these circumstances, small and medium-sized manufacturers like us buy expensive materials to make products or make them. There are only these two options at the site. I'm worried that Japan, which has been devoting itself to cost reduction, no longer has the power to buy expensive products. "
Green + inflation = "green inflation"
Soaring prices caused by competing for things that lead to decarbonization all over the world.
"Green" and "Inflation", where prices continue to rise, are collectively called "Greenflation".
It's not just "scrap iron" that is soaring in price.
For example, the recent soaring prices of "copper" and "aluminum" are often used as materials for solar power generation equipment and electric vehicles, and one of the factors is that global demand is increasing due to decarbonization.
In Europe, where dependence on fossil fuels such as coal and petroleum is reduced, the price of "natural gas," which emits relatively little carbon dioxide, has soared to record highs.
Rising electricity and gas costs could hit households directly.
Even beef and pork ...
As I proceeded with the interview, I was surprised to find that the influence of "green inflation" extends to food.
America, the world's largest corn producing area.
When a local representative of a major Japanese general trading company visited a farmer of a business partner last month, the price of corn shown was said to have risen by 60% from before Corona.
One of the reasons for the soaring prices is the growing demand for "bioethanol," which is mainly made from corn.
If "bioethanol" is used as fuel for cars, it emits less carbon dioxide than gasoline, which has attracted attention in the United States as it leads to decarbonization, pushing up the market.
Japan imports 90% of corn from the United States in many years, and most of it is used for feeding cattle and pigs.
The rise in corn prices due to decarbonization leads to soaring food costs, which eventually contributes to the rise in beef and pork prices.
Increased demand for pork in China, where economic activity resumed quickly, also spurred soaring corn prices.
A person in charge at a major general trading company said:
"I don't think the trend will change with the rise in global prices. Japan, which is not a food-sufficient country, must have a sense of crisis. Especially, the movement of China is a big move to prices. I think it's important to get information on their movements as soon as possible because it will affect them. "
Soaring prices of various goods against the backdrop of global decarbonization.
Experts point out that "green inflation is not a transient phenomenon."
“Many countries have set a long-term future goal for decarbonization, from 2035 to 2060, which can lead to prolonged price increases. Many resources, raw materials, etc. are overseas. In Japan, which is dependent on the economy, “buying and losing” will increase the burden and increase the outflow of income overseas. If such bad price increases continue, the world-leading economic recovery will be further delayed. It could be "
How to deal with an imminent problem
From the soaring price of "iron scraps" that are indispensable to Japanese manufacturing sites, the global acceleration of decarbonization and the trend of China, which has become one of the world's leading economic powers, have become apparent to the Japanese economy. It was an inseparable problem.
What I felt strongly again through the interview.
That is, decarbonization is not an issue for the carbon-neutral target year of 2050, but an urgent issue for us right now.
How should we deal with abnormal situations where conventional wisdom does not apply?
We will continue to carefully look at issues in the field.
Economics Department Reporter
Yosuke Nakano
Joined in 2008
After working at the
Kanazawa Bureau, Miyazaki Bureau, and
Sports News Department, he
was in charge of the Ministry of Economic Affairs.