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| Scrap Market |
Asian Scrap Prices Fall as Chinese Steel Exports Surge
The global scrap market is facing heightened pressure due to persistent macroeconomic instability. The Bureau of International Recycling (BIR), through its World Mirror report, highlights slowing demand, volatile currency conditions, and trade imbalances as key drivers of market weakness. This instability continues to limit scrap pricing power despite localized supply shortages.
Weak Demand Persists in the West, Despite Capacity Cuts
European scrap supply remains tight, especially in the UK, where shredders operate at around 60% of capacity. However, rolled steel prices across the continent continue to slump. As a result, the limited supply has not translated into higher scrap prices. Meanwhile, in Turkey, the dollar’s fall against the euro has weakened export competitiveness, placing additional pressure on pricing.
In contrast, the U.S. market saw scrap prices drop by $40 per ton in April and May, before stabilizing in June and July. This price stability followed rapid negotiations between dealers and mills, even as steel production dipped due to outages. Although import tariffs have supported domestic production, end-user demand remains insufficient to drive a sustained recovery.
Asia Faces Seaborne Scrap Challenges Amid Surging Chinese Steel Exports
The Asian seaborne scrap market is seeing intense downward pressure, primarily from aggressive Chinese steel exports. South Korean and Taiwanese mills are scaling back operations amid oversupply and weakening prices. Currency volatility and competitive billet offerings are also eroding buyer confidence. As a result, regional demand for ferrous scrap has dropped significantly, further depressing prices.
In the Gulf Cooperation Council (GCC) nations, construction-led steel demand remains robust. However, local scrap supply, while growing, still lags behind demand. This imbalance is prompting initiatives like the UAE’s investment in green ship dismantling to boost domestic availability of recyclable ferrous material.
India Emerges as a Rare Bright Spot in Global Scrap Consumption
According to BIR, global consumption of ferrous scrap declined across most major markets in Q1 2025. China, the EU, the US, Japan, Turkey, and South Korea all reported reductions. Notably, India stood out as the only large economy with increased scrap use, driven by growing infrastructure investments and expanding electric arc furnace (EAF) capacity.
ScrapInsight Commentary
Current market weakness reflects not just supply-demand imbalance, but broader structural and macroeconomic issues. Unless steel consumption recovers in key regions, especially in Asia and the EU, scrap prices may continue under pressure. India's demand growth offers a strategic opportunity, while regional supply innovations like ship recycling in the Gulf signal long-term resilience in the circular economy.
