Global scrap market under pressure from macroeconomic instability – BIR

The recycled steel (scrap) market continues to feel the burden of macroeconomic instability this year. This is stated in a report by World Mirror, a division of the World Recycling Association (BIR).

As noted, ongoing uncertainty continues to dampen market sentiment and has led to unfavorable conditions in the sector.

In Europe, the report says, limited scrap supplies are widely reported. At the same time, feedback from the UK, for example, indicates that many shredders are operating at only about 60% capacity. Despite limited flows of this material, the potential for price increases remains limited. In addition, in the Turkish market, the significant fall of the US dollar against the euro has led to a decline in sales prices. Rolled steel prices remain under pressure in many parts of Europe, limiting the potential for a broader recovery in the scrap market.

In the US, scrap prices fell steadily in April and May (by $40/t). However, thanks to rapid negotiations between dealers and mills, raw material prices remained unchanged in June and July amid a decline in steel production due to some planned and unplanned outages. Although steel production in the United States is healthy thanks to import tariffs, consumer demand remains the missing element.

The Asian seaborne scrap market is under pressure due to strong Chinese steel exports. For example, South Korean steelmakers are suspending operations amid oversupply at aggressive prices. Taiwanese producers also continue to cut steel production. Limited demand has led to a drop in scrap prices and reduced buyer interest. Mills are taking a cautious stance amid foreign currency volatility and competitive offers from billet sellers.

In the Gulf Cooperation Council countries, demand for steel remains high amid active construction activity. Domestic scrap supplies in the Gulf region are growing but remain limited. This is prompting initiatives such as the UAE’s investment in environmentally friendly ship dismantling.

In the first quarter of 2025, global consumption of ferrous scrap declined in most key regions. According to BIR data, there was a reduction in scrap use in China, the EU, the US, Japan, Turkey, and South Korea. The only major market where consumption increased was India.