Introduction
The global scrap metal market has started 2025 with mixed trends, reflecting the varying economic conditions and supply-demand imbalances across different regions. While scrap prices in the U.S. and Europe have risen steadily, China’s scrap market has experienced a downward trend, driven by weak demand in the steel industry. Meanwhile, Turkey, one of the largest scrap importers, is experiencing market volatility, with prices showing a recovery in February after a turbulent start to the year.
As of February 10, 2025, prices for HMS 1/2 80:20 scrap in Turkey have increased by 1.7% to $355 per ton, reversing earlier declines seen in January. This trend highlights the complex market dynamics driven by steel demand fluctuations, economic policies, and geopolitical factors affecting trade and logistics.
This article explores the key factors influencing global scrap prices, regional market developments, and predictions for the coming months.
Factors Driving the Recovery of Scrap Prices in 2025
The increase in global scrap prices can be attributed to multiple factors, including:
1. Stronger Demand from Steel Producers
Steelmakers worldwide are increasing production due to higher demand in key sectors like construction, infrastructure, and manufacturing. The push for greener steel production is also leading to greater use of recycled scrap, further driving up demand.
2. Supply Chain Adjustments & Logistics Challenges
- Many scrap exporters faced logistical challenges in late 2024, leading to tighter supply.
- Freight and transportation costs remain high, particularly for shipments between Asia, Europe, and North America.
- Reduced scrap collection in some regions has further limited availability, pushing prices higher.
3. Currency Fluctuations & Inflation Impact
- Global inflation remains a concern, affecting raw material costs across multiple industries.
- Currency exchange rates impact the purchasing power of key importing countries, influencing trade dynamics.
- As economies stabilize post-pandemic and geopolitical uncertainties ease, demand for raw materials, including scrap, is increasing.
4. China’s Economic Policies & Market Influence
China, the world’s largest steel producer, has implemented new economic policies aimed at stabilizing its construction and manufacturing sectors. The country’s import and export decisions significantly impact global scrap pricing, and any policy shifts can lead to further price fluctuations.
5. Sustainability Initiatives & Green Steel Trends
- More steelmakers are adopting Electric Arc Furnaces (EAFs), which rely heavily on scrap instead of iron ore.
- Environmental policies in regions like the EU and the US are pushing industries toward low-carbon steel production, increasing demand for high-quality scrap metal.
- Investments in recycling infrastructure are improving scrap collection, but demand still outpaces supply.
Turkey’s Scrap Market: Volatility and Recovery
Scrap Price Trends in Turkey
Turkey is one of the world’s largest importers of ferrous scrap, supplying its electric arc furnace (EAF) steel mills. However, the country’s scrap market has seen significant price fluctuations in early 2025:
- In January 2025, Turkish steel mills faced weak steel sales, leading to aggressive price negotiations with scrap suppliers. Scrap prices ranged between $334-$379 per ton, reflecting market instability.
- In February 2025, a 1.7% increase in prices was observed, reaching $355 per ton. This rise was driven by:
- Weather-related supply disruptions in Europe and the U.S.
- Rising domestic scrap prices in the U.S.
- A stronger Euro, which limited further declines in European scrap prices.
Key Factors Affecting Turkish Scrap Prices
- Fluctuations in Steel Demand
- Turkish steelmakers are facing lower steel demand, especially in export markets, which impacts their scrap procurement strategies.
- The market is closely watching Turkey’s steel export performance and domestic construction activity for further price trends.
- Exchange Rate Volatility
- The EUR/USD exchange rate plays a crucial role in determining scrap import costs.
- A stronger Euro limits price declines, while a weaker Turkish Lira increases import costs for local steelmakers.
- US and European Market Influence
- Rising domestic scrap prices in the U.S. and EU are pushing Turkish importers to accept higher price offers.
- Supply shortages due to winter conditions in Europe and the U.S. are further limiting availability.
Future Outlook for Turkey
Going forward, the Turkish scrap market will be influenced by:
- Turkey’s central bank policies on lending to steelmakers.
- Changes in steel sales volumes in both domestic and export markets.
- US trade policies and potential tariff changes, which could impact global scrap supply chains.
Market analysts predict scrap prices will remain within the $350-360 per ton range in the short term, with potential upward movement depending on steel demand and supply chain constraints.
European Scrap Market: Rising Prices Amid Supply Shortages
Current Price Trends
The European ferrous scrap market has remained relatively stable since the beginning of 2025, but with gradual price increases in the latter half of January and early February:
- Germany: Scrap prices (E3, ex-works) reached €302.5 per ton, marking a 1.7% increase since December 2024.
- Italy: Prices for E8-grade scrap rose to €345 per ton, up 2.2% compared to the end of 2024.
- Southern Europe: Prices for high-grade scrap reached €370 per ton, driven by low collection rates and increased import costs.
Supply and Demand Factors in Europe
- Scrap Collection Challenges
- In Italy, low collection rates due to reduced industrial production have forced steel mills to look for imported scrap, pushing prices higher.
- France, Belgium, and Luxembourg have seen stable prices, but scarce grades of scrap have increased by €5-10 per ton.
- Production Adjustments in the Steel Industry
- German and French steelmakers have cut production, reducing demand for scrap.
- Italy has experienced an increase in steel orders, forcing mills to step up scrap purchases, leading to higher prices.
Market Outlook for Europe
- Scrap prices in Southern Europe are expected to rise further in February and March due to:
- Winter-related collection difficulties.
- Limited import availability.
- Rising demand from Turkey.
- European producers must either adjust to higher scrap costs or reduce steel output to maintain profitability.
US Scrap Market: Strong Domestic Demand Pushes Prices Higher
Scrap Price Growth in the US
Since early 2025, scrap prices in the U.S. have risen by 4.3%, reaching $330.5 per ton (US East Coast FOB).
- The major increase occurred in early January, driven by:
- Adverse weather conditions disrupting scrap collection.
- A potential dockworker strike, causing supply uncertainties.
- Strong demand from domestic steel mills, despite weak export markets.
Key Market Drivers in the US
- Limited Scrap Supply
- Heavy snowfall in key states slowed down scrap procurement and transportation.
- Steel mills were forced to increase purchases due to low scrap inventories.
- Tariffs on Canadian & Mexican Steel Imports
- New tariffs on steel imports from Canada and Mexico have pushed US steel mills to focus on domestic scrap sources.
- Some analysts predict further price increases of $30-50 per ton, depending on scrap grades.
Future Expectations in the US
- Limited supply, rising steel prices, and new trade tariffs are expected to support further price increases in the coming weeks.
- However, pressures from international buyers (especially Turkey) could limit the growth rate.
China’s Scrap Market: A Decline Amidst Weak Steel Demand
Falling Scrap Prices in China
Unlike other global markets, China has experienced a 4.5% decline in scrap prices, dropping to $325.8 per ton in early 2025.
Factors Contributing to the Decline
- Weakened Demand from Steel Mills
- Chinese steelmakers have reduced scrap purchases ahead of the Chinese New Year.
- High inventory levels have further pressured prices.
- Slowdown in the Construction Sector
- Construction remains China’s largest steel-consuming industry, but economic uncertainty has reduced demand for rebar and hot-rolled steel.
- Despite government stimulus efforts, infrastructure and real estate activity remain sluggish.
Outlook for China’s Scrap Market
- Scrap prices are expected to remain weak in Q1 2025, with potential recovery later in the year depending on:
- Government economic stimulus efforts.
- Steel demand growth in key industries.
Future Outlook: Will Scrap Prices Continue to Rise?
While the 1.5-2% recovery in scrap prices since early 2025 is a positive sign, the market remains dynamic. Several factors will determine price movements in the coming months:
✅ Steel Demand Growth: If global infrastructure and construction projects continue to expand, scrap prices could see further gains.
✅ Economic Stability: Inflation control and currency stability will play key roles in maintaining demand for scrap.
✅ Regulatory Changes: Environmental policies and trade regulations could influence scrap availability and pricing.
✅ Geopolitical Factors: Political tensions and trade policies may impact global supply chains and scrap exports.
Experts predict that scrap prices will remain firm or experience gradual increases throughout 2025, but potential economic slowdowns in major markets could introduce volatility.
Conclusion
The global scrap market in early 2025 reflects regional differences in demand, supply, and economic conditions:
✅ Turkey & Europe are seeing gradual price recoveries due to limited supply and stronger domestic demand.
✅ The US has experienced a 4.3% increase in scrap prices, driven by weather disruptions, domestic demand, and trade policies.
✅ China’s scrap market is declining due to weak steel demand and high inventories.
As the steel industry adapts to economic shifts, environmental policies, and geopolitical influences, scrap prices will likely remain volatile in the coming months.
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Reference Links:
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2️⃣ Global Steel Web
3️⃣ Vietnam Steel