Global recycled steel market faces headwinds

The Turkish market is the global price-setter for heavy melting steel (HMS), yet it has remained remarkably stable in recent months.

Since early May, the daily Davis Index for Turkish imports of United States-origin HMS Nos. 1 and 2 (80:20) has remained range-bound between $340 per metric ton cfr, or cost and freight, and $350 per metric ton cfr. Moreover, the index has hovered around $346.75 per metric ton cfr since early July until Aug. 6.

Prices for imported ferrous material in Turkey remain range-bound as mills are unable to push for lower prices given reduced volume offers from the U.S., challenging collection conditions in the European Union and rising freight rates. Recyclers also are unable to secure higher prices amid insufficient Turkish steel product sales in the domestic and export markets, limiting the upside of raw material.

On July 4, sales from the U.S. to Turkey were reported at $347 per metric ton cfr for HMS Nos. 1 and 2 (80:20) and $367 per metric ton cfr for shredded and bonus grades. Since then, prices for U.S.-origin material have held at $346-$347 per metric ton cfr.

Turkish mills are securing ferrous cargoes cautiously in line with their production requirements, avoiding creating frantic demand.

Steel mills in Turkey as of August are under increasing pressure because of firm raw material costs, particularly for recycled steel. In response, they are raising prices for finished steel products despite sluggish market demand, making it difficult to secure orders.

Most importers have attempted to keep prices in check by submitting lower bids, but sellers from Europe and the U.S. have found it extremely difficult to lower their offered prices.

The US market

U.S. exports are affected by rising shipping costs in particular as freight rates have climbed to $40 per metric ton from the East Coast to mills in southern Turkey.

The U.S. recycled ferrous market remained flat for the third consecutive month since May. The only grade that garnered a slight price increase in some regions was machine shop turnings.

The potential for prices to increase because of U.S. tariffs on Brazilian imports was erased in late July as pig iron from that country was exempted, while recycled material flows from Canada and Mexico remain unrestricted in light of raw materials exemptions.

The supply and demand dynamics remained balanced throughout the summer, and the increased prices that were hoped for in July and August did not materialized.

As of press time, the September outlook was retreating. While some market participants still can justify a price increase, others note market concerns, reducing expectations of price increases.

Sheet and plate prices remain soft on weak demand and increasing domestic capacity despite the U.S. Section 232 tariffs on imported steel, which rose from 25 percent to 50 percent June 4. The tariffs reduced imports’ market share to 21 percent in the first half of the year from 23 percent in the same period in 2024.

U.S. domestic crude steel production grew by slightly more than 1 percent annually from January to early August and is expected to slightly exceed the 58 million net metric tons that were produced in the same period in 2024. Finished steel shipments gained 3.2 percent year over year in the first half of 2025, according to the Washington-based American Iron and Steel Institute.

Sheet, plate and rebar prices have decreased despite mill base price announcements. Market participants note that despite official prices, mills are willing to negotiate deals, reinforcing the disconnect between official prices and transaction prices.

On Aug. 5, hot-rolled coil prices fell to $850 per net metric ton fob, or freight on board, Midwest, down 0.6 percent from the previous day and 4 percent from $883 per net metric ton fob July 1, though prices still are 24 percent higher compared with the same period a year ago.

Steel demand is expected to continue receiving support from infrastructure, energy and nonresidential construction projects, but public projects continue to have financing delayed, while private projects face high interest rates.

The U.S. auto industry is seeing significant disruptions, including to the supply chain, affordability and electric vehicle policies, but new vehicle sales are expected to be slightly higher annually.

With subdued export demand and relatively level prices, U.S. domestic recycled ferrous prices might not increase until October or later in the fourth quarter, depending on winter’s influence.

The European market

European ferrous sellers face their own challenges, including slow material arrivals at export terminals and the usual logistical difficulties associated with summer. But the biggest factor affecting exporters is the appreciation of the euro against the U.S. dollar.

The currency has continued to appreciate gradually throughout the year, gaining 6.54 percent in a month to reach 1 euro being equivalent to $1.07 as of March 27. On Aug. 5, one euro equaled $1.15, up from $1.02 in early January.

A slow export market and weak global cues, therefore, kept ferrous dockside prices in the Amsterdam, Rotterdam, Antwerp and Ghent region in Belgium under pressure, and the Davis Index for HMS Nos. 1 and 2 (75:25) settled at 238 euros ($272.14) per metric ton delivered dockside, reaching a five-year low April 22—a level last seen during the COVID-19 pandemic.

Prices have regained but have hovered around 245-255 euros ($287-$299) per metric ton since late June into early August.

According to Denis Reuter, chief operating officer at German company TSR Recycling GmbH and a board member of the Brussels-based Bureau of International Recycling (BIR) Ferrous Division, this appreciation in price has reduced competitiveness, particularly related to Turkey.

Despite scarce availability and rising export prices in June, a recovery was not sustained. High collection costs, low prices and generally subdued material volumes placed an additional burden on the trade, according to the BIR “World Mirror on Ferrous Metals” released in July, and the pattern continued into August.

For example, French recycling company Derichebourg says the volume of recycled steel sold in the first half of 2025 fell by 5.5 percent driven by limited demand for the material from destination markets, which mainly include the European steel industry and, to a lesser extent, Turkey, Egypt and Morocco.

Consumers of the raw material faced their own difficulties and high production costs, largely from energy, and fewer outlets, with the construction and automotive markets slowing for several semesters. Moreover, competition from low-priced semifinished Chinese steel products, imported in large quantities into the European Union—especially into Turkey—also dampened demand. The average price of recycled steel sold by Derichebourg was 328.7 euros ($381.82) per metric ton in the first half, down by 6.4 percent compared with last year. The revenue from the business amounted to 684.6 million euros ($795.2 million), down by 11.5 percent in the same period in 2024.

The United Kingdom market

The U.K. recycled steel sector has remained relatively sluggish in recent months.

Several factors have contributed to this scenario, including a decline in Turkish demand, which led to lower dockside prices; a softer U.S. dollar putting downward pressure on domestic U.K. pricing; and ongoing macroeconomic uncertainty that has dampened market confidence, according to Tom Bird, executive chairman of U.K.-based Enicor. Also, challenges like limited container availability, rising freight costs, exchange rate fluctuations and subdued demand collectively have pushed prices downward.

Some improvement was noted as the price of HMS exported to Turkey reached the mid $340-per-metric ton range, reflecting a modest uptick in demand. However, finished steel prices continue to face downward pressure, restricting the potential for a wider market rebound, Bird says in the “World Mirror.”

Supply remains tight, with many shredding operations running at approximately 60 percent capacity given constrained volumes and cautious approaches to business.

Looking forward, the market is expected to trade within a confined window of about $20, likely ranging from the mid-$320s-$340s per metric ton cfr Turkey. Bird says exchange rate instability and wider economic conditions are expected to influence ferrous market sentiment and pricing trends.

The Asian market

The Japanese market largely is in wait-and-see mode. As of mid-June, the actual price in the three major markets of Kanto, Tokai and Osaka was about 40,000 Japanese yen ($270) per metric ton, roughly on par with the high price level, according to Ted Taya, president and CEO at Shinsei Scrap Co. of Japan.

Amid reduced crude steel output and soft domestic generation of recycled steel, supply and demand roughly are in balance.

The Tokyo-based Kanto Tetsugen Cooperative Association will handle 20,000 metric tons for the first time since it was established in 2001. On June 11, the organization won a tender for the joint export of recycled steel for the June contract at 42,267 Japanese yen ($285) per metric ton, down 122 Japanese yen (82 cents) from the previous bid, Taya says.

Japanese recycled steel export prices continued shrinking in the second quarter amid a moderate buying appetite from major East Asian importers.

The Davis Index for HMS No. 2 shrank by nearly 7 percent, or 3,000 Japanese yen ($20) per metric ton, since April 1 to settle at 41,500 Japanese yen ($275) per metric ton fob Tokyo Bay July 31.

Tokyo Steel Manufacturing Co. Ltd., Japan’s leading electric arc furnace steelmaker, has lowered its recycled steel purchase prices several times, paying roughly 38,000-40,500 Japanese yen ($252-$269) per metric ton for HMS No. 2 deliveries at its Tahara, Okayama and Kyushu sites and Takamatsu Steel Center.

Seaborne buying activity in most key regions, like Taiwan, Vietnam and South Korea, was sluggish in the second quarter as leading steelmakers slashed bids for containerized imports of recycled steel in lieu of competitive offers for billet.

Taiwanese and South Korean steelmakers continue to curtail production and suspend operations amid oversupply.

Notably, U.S.-origin containerized HMS Nos. 1 and 2 (80:20) shrank by more than 9 percent to around $290 per metric ton cfr Taiwan July 31 compared with $320 per metric ton at the end of April, per Davis Index.

Olga Yakymchuk is senior ferrous analyst at Davis Index and can be reached at olga.yakymchuk@davisindex.com. Aditya Sinha is Asia ferrous analyst and can be reached at aditya.sinha@davisindex.com. Zulma Herrera is chief operations officer and can be reached at zulma.herrera@davisindex.com