Scrap Iron Price Trend Report and Forecast 2026-2027

Introduction: Understanding the Scrap Iron Market

Scrap iron – encompassing ferrous scrap grades from HMS 1&2 to shredded steel and cast iron – is the backbone of the global circular steel economy. As the primary feedstock for electric arc furnace (EAF) steelmaking and a critical supplementary charge in basic oxygen furnaces (BOF), scrap iron pricing directly influences steel production costs across every major industrial economy. The scrap iron price trend in FY25 was characterised by a mildly bearish trajectory, with five of six tracked regions recording net full-year declines amid global steel overcapacity and Chinese export displacement.

The scrap iron market’s demand structure is driven by several interconnected end-use sectors:

• Construction and Infrastructure – the largest sector at approximately 38% of global scrap demand, driven by housing and public works
• Automotive and Transport – end-of-life vehicles supply significant scrap volumes while manufacturing drives steel demand
• Machinery and Equipment – industrial offcuts and decommissioned equipment supply high-grade scrap
• Shipbuilding and Demolition – vessel scrapping in South Asia and Turkey provides substantial EAF feedstock
• Consumer Goods – appliance recycling volumes grow as replacement cycles accelerate in developed markets

Sources: Expert Market Research; Procurement Resource; World Steel Association; U.S. Geological Survey

Global Scrap Iron Market Overview

The global steel scrap market was valued at approximately USD 88.0 billion in 2025, projected to reach USD 113.4 billion by 2030 at a 5.1% CAGR. Global scrap consumption in 2024 reached 460.6 million tonnes, while steel production totalled 1.55 billion tonnes. Ferrous scrap accounted for 71.4% of all recycled metals, with EAF steelmaking consuming the majority. In the United States, 72% of steel production originates from scrap, recycling over 100 million tonnes annually.

FY25 was shaped by two countervailing forces. On the demand side, China’s steel exports hit record levels – 118 million tonnes in 2024, growing 10% in 2025 – displacing scrap-based production globally. The OECD warned that steel overcapacity would exceed 680 million tonnes by end-2025. On the supply side, China’s National Resources Recycling Group centralised scrap collection, while domestic scrap iron resources reached an estimated 338 million tonnes. This tension between demand displacement and supply expansion defined the scrap iron price trend throughout FY25.

Sources: Expert Market Research; Procurement Resource; OECD Steel Outlook 2025; World Steel Association

Global Scrap Iron Price Trend FY25

The scrap iron price trend in FY25 reflected a market under sustained pressure from steel overcapacity but cushioned by structural decarbonisation demand for EAF feedstock. Key drivers included:

• Chinese Steel Overcapacity: OECD projected excess capacity exceeding 680 million tonnes by 2025; Chinese steel exports rose 10% year-on-year, displacing scrap demand in Turkey and Southeast Asia.
• Cheap Billet Substitution: Chinese semi-finished steel exports of 2.2 million tonnes in September-October alone replaced approximately 12% of global scrap supply, driving a 15% decline in scrap prices during that period.
• US Tariff Protection: Revised 50% steel import tariffs in 2025 altered global scrap flows, benefiting domestic recyclers while magnifying input cost volatility for import-dependent producers.
• EAF Structural Demand: China targeted 15% EAF share of crude steel output by 2025; India and the US continued EAF capacity additions, providing a long-term demand floor for scrap iron.

Sources: Expert Market Research; Procurement Resource; OECD; Fastmarkets

North America: Regional Price Analysis FY25

North America recorded the steepest scrap iron price decline among the six tracked regions, falling from USD 0.332/KG in Q1 to USD 0.302/KG by Q4 – a 9.1% full-year erosion. The Q3 drop of −6.1% was the sharpest quarterly move globally, driven by weakening construction and subdued manufacturing output. Despite 50% tariff protection on finished steel imports, EAF operators maintained conservative run rates amid demand uncertainty.

Sources: Procurement Resource; Expert Market Research; American Iron and Steel Institute

United States: Regional Price Analysis FY25

US ferrous scrap iron prices followed a parallel decline, from USD 460.17/MT in Q1 to USD 418.83/MT by Q4 – a 9.0% drop. Q2 absorbed the sharpest correction at −6.5% as mills delayed purchases amid trade policy uncertainty. Q4 stabilised at +0.1% on seasonal demand and inventory restocking. US steel capacity utilisation averaged 76.0% in Q4, below the 80% threshold for sustainable pricing power. The structural monthly scrap deficit on the Gulf Coast continued, partially offset by EU and Latin American imports.

Sources: Procurement Resource; Expert Market Research; AISI; Fastmarkets US Scrap Trends

Europe: Regional Price Analysis FY25

The European ferrous scrap price exhibited a distinctive boom-bust pattern, surging +7.2% in Q2 before collapsing −7.1% in Q3 and −5.3% in Q4. The full-year decline was 5.8%, from USD 0.434/KG to USD 0.409/KG. The Q2 spike reflected seasonal construction restocking, but the reversal was driven by weak flat steel demand, Turkish import competition, and the EU’s position as the world’s largest scrap exporter at 11.94 million tonnes (+4% YoY). The EU CBAM is expected to increase Chinese steel export costs by 4–6% from 2026, potentially redirecting demand toward scrap-fed EAF production.

Sources: Procurement Resource; Expert Market Research; European Commission (CBAM); Eurofer

Northeast Asia: Regional Price Analysis FY25

Northeast Asian scrap iron prices recorded a steady 3.0% full-year decline, from USD 0.329/KG in Q1 to USD 0.319/KG by Q4, with unbroken quarter-on-quarter erosion. Chinese finished steel and billet exports undercut scrap-based EAF economics across the region. Japan and South Korea faced competitive pressure from lower-priced Chinese imports, while Japan’s EAF operators maintained conservative procurement amid weak domestic construction demand.

Sources: Procurement Resource; Expert Market Research; Japan Iron and Steel Federation

India: Regional Price Analysis FY25

India’s scrap iron price trend tracked a 3.0% full-year decline, from USD 0.329/KG in Q1 to USD 0.319/KG by Q4, with steady erosion throughout. Despite this pricing softness, India’s demand remained the strongest globally – crude steel production surged 10% year-to-date in the first ten months of 2025, reaching 136 million tonnes. Steel demand growth of 9% in both 2025 and 2026 positions India as the primary growth driver in the global scrap iron market, requiring 75 million additional tonnes of steel versus 2020 levels by 2026.

Sources: Procurement Resource; Expert Market Research; World Steel Association; India Ministry of Steel

Middle East: Regional Price Analysis FY25

The Middle East posted the flattest scrap iron price trajectory, with a marginal 1.9% decline from USD 0.327/KG in Q1 to USD 0.321/KG by Q4. Q2 was flat, Q3 dipped −3.2% on weakening crude revenues and construction adjustments, and Q4 recovered +1.2%. Turkey, the world’s largest scrap importer at approximately 14 million tonnes per annum, faced disruption from cheap Chinese billet under inward-processing regimes, displacing an estimated 12% of scrap demand during peak months.

Sources: Procurement Resource; Expert Market Research; Fastmarkets; Turkish Steel Producers Association

Scrap Iron Forecast: FY26 Market Outlook

The scrap iron forecast for FY26 indicates continued range-bound pricing with a mild bearish bias through mid-year, followed by potential stabilisation as structural decarbonisation demand strengthens:

• Chinese Overcapacity Persists: OECD projects excess steel capacity reaching 721 million tonnes by 2027; Chinese exports will continue displacing scrap demand.
• EU CBAM Repricing: From 2026, CBAM increases Chinese steel import costs by 4–6%, potentially redirecting European demand toward scrap-fed EAF production.
• India’s Growth Anchor: 9% steel demand growth and EAF expansion make India the primary volume driver for scrap iron demand in FY26.
• EAF Transition Accelerates: China’s 15% EAF target and 1.5:1 decommissioning rules will structurally increase scrap consumption from late FY26.

Sources: Expert Market Research; Procurement Resource; OECD; Goldman Sachs Commodity Research

Key Takeaways for Buyers and Manufacturers

For Procurement and Sourcing Professionals

• Lock in favourable pricing: All regions near cyclical lows; negotiate long-term scrap iron cost contracts while pricing remains depressed at USD 300–420/MT.
• Diversify supply origins: EU export volumes rising (+4% YoY); leverage European availability to reduce dependence on volatile Asian flows.
• Monitor billet-scrap spread: Chinese billet at sub-USD 400/MT displaces scrap demand; widen procurement to include semi-finished substitutes when economics favour it.
• Hedge against CBAM repricing: European ferrous scrap prices may firm from 2026 as CBAM redirects steel demand toward lower-emission EAF routes.

For Manufacturers and Producers

• Invest in EAF capacity: EAF reduces CO₂ by up to 70% versus BOF; carbon credit monetisation and CBAM compliance favour scrap-based production.
• Secure Indian market access: India’s 9% steel demand growth and 75 million tonne incremental requirement by 2026 represent the largest volume opportunity.
• Upgrade sorting technology: AI-driven sensor-fusion sorting lifts recovery yields, commanding premium pricing for high-grade scrap.
• Target decarbonisation premiums: Low-emission steel from scrap commands increasing premiums as ESG mandates and carbon pricing expand.

Sources: Expert Market Research; Procurement Resource; Goldman Sachs; OECD

Analyst Insights

The scrap iron price trend in FY25 revealed a market caught between structural headwinds and long-term tailwinds. Chinese steel overcapacity exceeding 680 million tonnes and exports of 118+ million tonnes displaced scrap demand across Turkey, Southeast Asia, and Northeast Asia. However, the decarbonisation imperative – with EAF producing 70% fewer emissions – provides a structural demand floor that prevents the deep decline seen in commodities like benzene or soda ash.

FY26 will be defined by the interaction between CBAM implementation, Chinese capacity rules, and Indian demand growth. If China’s 1.5:1 decommissioning ratio is enforced alongside the 15% EAF target, global scrap consumption could accelerate from late FY26, establishing a new equilibrium above current depressed levels in the scrap iron market.

Sources: Expert Market Research; Goldman Sachs Commodity Research; OECD Steel Outlook

Sources and References

• Expert Market Research, Scrap Iron and Steel Price Trends 2025
• Expert Market Research, Global Steel Scrap Market Report 2025
• Procurement Resource, Ferrous Scrap Price Index and Historical Data
• Goldman Sachs Commodity Research
• OECD Steel Committee, Steel Outlook 2025 (98th Session, November 2025)
• World Steel Association, Global Steel Demand Forecast 2025–2026
• American Iron and Steel Institute (AISI), Weekly Raw Steel Production Data
• Fastmarkets, US Ferrous Scrap Trends Outlook 2025–2026
• European Commission, Carbon Border Adjustment Mechanism (CBAM) 2026
• China Ministry of Industry and Information Technology, Steel Capacity Replacement Rules (2025)
• China National Development and Reform Commission, National Resources Recycling Group (September 2024)
• India Ministry of Steel, Annual Steel Production Report 2025
• Japan Iron and Steel Federation
• Turkish Steel Producers Association
• Trading Economics, Commodity Data, February 2026