The global scrap market started 2025 with mixed dynamics. In the US and Europe, prices are gradually rising amid limited supply and strong demand, while in China they are declining due to weak activity in the steel industry. Turkey, one of the key importers of scrap, is also experiencing a period of volatility, but in February the market began to show signs of recovery.

Since the beginning of 2025, scrap prices (HMS 1/2 80:20) in Turkey have increased by 1.7% to $355/t (as of 10 February). At the same time, the increase occurred in February, while in January, offers ranged from $334-379/t.

In January and early February, the Turkish ferrous scrap market was highly volatile due to a number of global and local factors. The beginning of the year was marked by a decline in prices due to weak steel sales and aggressive pressure from Turkish steelmakers on raw material suppliers. The decline was also driven by cheaper Asian slabs and lower rebar prices.

At the same time, the strengthening of the euro created an additional barrier to a further fall in European scrap prices. In the second half of January, a gradual recovery in prices began as a result of weather conditions in Europe and the US that reduced the supply of scrap, as well as higher domestic scrap prices in the US.

February was marked by further market strengthening as a number of deals were made at higher levels. The US and the Baltic states raised their price targets, expecting further growth in domestic prices. Turkish steel mills, despite a decline in steel sales, were forced to accept higher prices due to a reduction in available scrap volumes and fears of further price increases.

Going forward, the market is expected to remain influenced by several key factors: the Turkish central bank’s policy on lending to steelmakers, fluctuations in the EUR/USD exchange rate and the situation on the steel markets. Additional uncertainty is created by the US trade policy, in particular the tightening of tariff restrictions, which could affect global supply chains.

Given current trends, it is likely that scrap prices will remain in the range of $350-360/t in the short term, but further developments will depend on the dynamics of steel sales and the activity of major raw material exporters.

The European market also saw a rise in prices. In particular, in Germany, scrap offers (E3, ex-works) as of 10 February 2025 were €302.5/t, up 1.7% compared to the end of December 2024, and in Italy (E8, ex-works) at €345/t (+2.2%).

The European ferrous scrap market has been relatively stable since the beginning of 2025, but with a gradual rise in prices in the second half of January. In France, Belgium and Luxembourg, quotations remained almost unchanged, although some scarce grades rose by €5-10/t. Meanwhile, in Germany and Austria, prices remained at the level of December due to low domestic demand and limited exports.

The key factor behind the market dynamics was a shortage of scrap in Italy. Low collection levels due to reduced production in the industrial sector forced local steel mills to look for raw materials outside the domestic market, which pushed up prices for high-grade grades to €370/t. Imports from France and Germany also saw an increase in value, confirming the general trend of scrap shortages in the region.

The market was also affected by production adjustments by steel companies. In Germany and France, a number of plants cut production, which restrained demand for scrap. At the same time, Italy had the opposite effect: an increase in orders in February forced steel mills to step up purchases, which led to a further rise in prices.

Market prospects point to a likely further rise in scrap prices in February and March. Reduced winter collection and limited imports may lead to a shortage, especially in Southern Europe. At the same time, demand from Turkey may improve, further supporting prices. European producers will therefore either have to accept the new realities of raw material costs or cut output to maintain profitability.

In the US, scrap prices have risen by 4.3% since the beginning of the year to $330.5/tonne (US East Coast FOB), with the main increase occurring in early January.

The main factors affecting the market were adverse weather conditions, logistics disruptions and changes in global demand. Heavy snowfall in five states hampered scrap procurement and transportation, while a possible dockworker strike created further uncertainty over supply. Despite the weak export demand, the domestic market proved resilient, driven by the activity of steel mills, which unexpectedly stepped up purchases in early January with stronger demand. This led to an increase in domestic prices by $10-20 per tonne.

In February, scrap prices continued to rise. Limited supply due to winter frosts, low stocks at factories and rising steel prices contributed to the market’s recovery. The US imposition of tariffs on steel imports from Canada and Mexico also affected the market, forcing US mills to focus on domestic sources of raw materials. Some market participants predicted a price increase of $30-50/t, and in some cases up to $60/t, depending on the category of scrap.

The market is expected to maintain its upward trend in the coming weeks. Limited supply, a possible correction in steel prices and new tariffs could support further growth. At the same time, pressure from international buyers, in particular Turkey, which is seeking to reduce purchase prices, may limit the growth rate to some extent.

China’s ferrous scrap market saw a decline in prices in January-February 2025, which contrasted with global trends. The cost of raw materials fell by 4.5% to $325.8 per tonne, driven by weak demand from steel mills, high inventories and a seasonal decline in production activity. In the run-up to the Chinese New Year, steelmakers traditionally reduced purchases, which increased pressure on prices.

The slowdown in the construction sector, which remains the main consumer of steel in China, was one of the key factors behind the market’s weakening. Despite the government’s efforts to stimulate the economy, construction activity remained low and domestic demand for rebar and hot-rolled steel was volatile.

Courtesy: https://gmk.center/