SEOUL (Reuters) – South Korea intends to use steel scrap from abandoned buildings, structures, and cars as a strategic resource, a South Korean government official stated on Thursday. The announcement came amid tight supplies, a rise in the price of Ukrainian invaders, and a shortage.

The official stated that Asia’s fourth-largest country is looking into multiple avenues, including an incentive system to get enough steel scrap. Research firm Fastmarkets says prices have shot up almost 40% from February.

South Korea is an important steel buyer due to its extensive auto, shipbuilding, and appliances industries. In 2020, 83% of the country’s steel scrap was sourced locally. Russia provided 13%.

As demand increases, the shortages caused by the conflict in Ukraine have had an impact, according to Lee Jaeyeon, an official at the trade ministry’s metals-and ceramics division.

According to her, “The global demand for electric furnaces has increased as they emit less CO2 than blast furnaces.” According to her, “The demand is rising for steel scrap as a feedstock for electric ovens.” It is a key strategic material that we are trying to manage.

In 2020, the sixth largest producer of steel worldwide produced 31% with electric arc furnaces.

Consulting Wood Mackenzie predicts that the crude steel produced in electric arc furnaces could reach 48% of global steel production by 2050. This is comparable to traditional blast furnace steelmaking which was 30%.

Russian scrap steel prices have risen since Moscow placed a tariff this month on exports to stabilize domestic prices.

Korea International Trade Association data showed that South Korea imported more Russian steel scrap than it had ever before, to $24 Million in April.