Abstract: A method of melting iron scrap using an arc furnace with reduced electric power consumption.In one of a pair of vessels which are arc furnace bodies, melting of the scrap by heat of arc is carried out while a carbonaceous material and oxygen-containing gas are introduced therein to cause oxidation of C to CO to make use of the oxidation heat. Thus formed hot exhaust gas containing CO is introduced to the other vessel of the pair and oxygen-containing gas is added thereto to cause oxidation of CO to CO.sub.2 thereby heating the scrap loaded in the vessel. Melting is further continued by changing the roles of the two vessels to each other.Generation of the CO-containing hot gas can be performed in a separately installed gasification furnace.