European ferrous scrap exports rise 6% in CY'25 amid declining crude steel production

• Europe exports over 20% of its scrap outside region
  
  
• Rising scrap intensity fails to lift domestic consumption
  
  
• CBAM, SMAP to support higher domestic scrap retention
  
  

Morning Brief: European ferrous scrap exports grew 5.8% y-o-y to 22.5 million tonnes (mnt) in CY'25, as per data maintained with BigMint. This was driven by a 2.5% drop in crude steel output, indicating weaker domestic demand and higher reliance on exports.

Previously, exports had declined to a five-year low in CY'24, mainly due to reduced shipments to India amid weak demand and high landed costs. Global demand softness, elevated freights, and tighter mill margins also weighed on trade, while relatively stronger domestic consumption in Europe limited export availability.

Over 1/5th of collected scrap gets exported

Europe continues to ship a significant share of its scrap amid ample domestic availability. In CY'25, around 22.5 mnt were exported out of 90 mnt generated, similar to 21 mnt out of 89 mnt in CY'24, meaning over one-fifth of collected scrap leaves the region.

This highlights a persistent surplus, where supply exceeds what domestic steelmakers can absorb, keeping Europe firmly positioned as the world's leading scrap exporter.

Going forward, improving scrap quality and closely monitoring trade flows will be critical to ensure adequate availability for high-grade steel production and avoid regional supply tightness.

Reasons behind stronger scrap exports

Export growth led by select suppliers: Export growth in CY'25 was led by a few suppliers, with the Netherlands (+62%), Germany (+10.7%), Finland (+38.5%), and the UK (+4.7%) expanding shipments, while Poland, Denmark, and France recorded declines. Turkiye remained the dominant destination, followed by Egypt, Pakistan, India, and Morocco, highlighting continued reliance on established Mediterranean and South Asian markets. Stronger exports were primarily driven by subdued domestic steel production, which freed up scrap availability, alongside firm import demand from key consuming regions.

Country-level dynamics further shaped trade flows. The UK maintained stable exports, with higher shipments to Pakistan and Morocco offsetting weaker flows to Egypt and India, while the Netherlands strengthened its position through increased volumes to Turkiye and Egypt. Improved logistics efficiency and competitive pricing -- supported by major recyclers -- also contributed to higher export competitiveness.

However, even as overall European scrap exports increased in CY25, shipments from several key countries declined. Export volumes dropped in Denmark (-7%), Bulgaria (-21%), Sweden (-5%), and France (-23%) y-o-y, reflecting uneven recovery across the region.

This was mainly due to weaker demand and shifting trade flows. Lower imports from Turkiye further pressured exports, while Indias shift toward domestic direct reduced iron (DRI) and high energy costs continued to weigh on the overall market.

Lower steel output weighs on European scrap consumption: Europe's scrap market is tightening gradually, but the trend remains closely tied to declining crude steel output. Scrap generation has stayed broadly stable at 89-103 mnt, while consumption fell from 85 mnt in CY'21 to 71 mnt in CY'23, before recovering slightly to 76 mnt in CY'24-CY'25. This mirrors the drop in crude steel production from 152.8 mnt in CY'21 to 126-129 mnt in CY'23-CY'25, indicating that weaker steel output has directly curtailed scrap demand.

At the same time, scrap intensity continues to rise, with scrap-based share increasing from 50% to over 52%, reflecting a structural shift towards EAF-led production and decarbonisation. However, this higher intensity has not translated into stronger absolute consumption due to lower overall steel output.

Trade flows under policy watch: The Carbon Border Adjustment Mechanism (CBAM) is expected to support domestic scrap retention by enhancing the value of low-carbon steelmaking within Europe. In parallel, the European Commission has introduced customs surveillance of metal waste and scrap flows under the Steel and Metals Action Plan (SMAP) adopted in March 2025.

Although this surveillance does not currently restrict exports, it forms part of a broader policy framework exploring options such as export duties or restrictions to prevent EU-generated scrap from supporting lower-cost, carbon-intensive production outside the region. These measures aim to improve data transparency, guide recycling targets, and reduce over-reliance on exports as Europe advances its circular economy goals.

Over time, these policies may tighten export availability, although near-term flows are expected to remain supported by Europe's structural scrap surplus and strong demand from Turkiye. CBAM is also likely to increase emphasis on carbon accounting, traceability, and compliance, making scrap trade more selective and favouring higher-quality, well-documented material.

Price trends

Europe's bulk scrap export market has shown a clear cyclical movement over CY'24-26, followed by a sharp recovery. Prices declined steadily from a peak of around $387/t in early CY'24 to a low of nearly $305/t by late CY'25, reflecting weak global steel demand, subdued scrap consumption, and ample supply.

A brief rebound to $350/t in early CY'25 was short-lived, with prices again softening due to sluggish buying interest. However, from Q4CY'25 onwards, the market entered a strong uptrend, with prices rising consistently from the bottom $305-310/t to $330/t by December 2025. This recovery was driven by tightening scrap availability, improved export demand, and higher scrap-based global steel production, indicating a shift to a slightly tight market heading into CY'26.

Outlook

Looking ahead, global scrap supply is expected to tighten. Higher US tariffs (up to 50%) could increase domestic scrap demand by 10-25 mnt, limiting export availability, while China's plan to raise EAF share from 10% to 15% may add around 45 mnt of incremental demand. These developments point to intensifying global competition for scrap, supporting prices.

In Europe, the scrap market is likely to remain firm but gradually tighten as the shift towards low-carbon steelmaking accelerates. Expanding EAF capacity and policy support, including CBAM, are expected to increase domestic consumption, reducing exportable surplus over time. While demand from key importers such as Turkiye will continue to support trade flows, export volumes may face pressure from rising internal demand and policy interventions.

At the same time, the market is increasingly moving towards higher-quality scrap, essential for efficient green steel production. Although Europe is expected to remain a net exporter, the structural surplus is likely to narrow, leading to a more balanced market. Prices are expected to remain firm amid global uncertainty and weak steel margins. In CY'26, tighter supply conditions -- driven by subdued construction activity, logistical constraints, and uneven steel demand -- could further strain the market, potentially triggering consolidation among recyclers.