Global ferrous scrap prices trended upward throughout May 2026, recording gains of 1% to 3% across most major international markets. This broad-based recovery highlights tightening supply chains and localized logistics challenges, even as steelmakers grapple with mixed demand for finished products. Notably, China remained the outlier, serving as the only major market where import prices faced a decline.
Regional Divergence in Price Drivers
The Turkish market, a key barometer for global deep-sea trade, saw prices climb to $408.5/t CFR by late May. While high collection costs in Europe initially provided upward pressure, the market eventually cooled as freight rates corrected and buyers pushed back against high costs. Conversely, the European market demonstrated greater confidence; strong capacity utilization in Germany and Italy, compounded by logistical bottlenecks—such as infrastructure repairs and low water levels hindering barge transport—kept domestic scrap supply tight and pricing elevated.
In the United States, the scrap market maintained a steady, moderate growth trajectory. Domestic electric arc furnace (EAF) demand provided a reliable foundation for prices, effectively decoupling the domestic market from weaker external export signals. Meanwhile, China’s internal scrap market moved higher on improved steelmaker margins, though the import segment faltered as international offers remained uncompetitive against lower-cost local material.
Outlook for Global Scrap Markets
The transition into June brings a shift in market dynamics. In Turkey, weak demand for finished steel products like rebar is likely to keep price growth in check. Europe may face a seasonal slowdown, while the U.S. market expects supply to increase as summer collection rates ramp up. Overall, while the supply side remains constrained in key regions, sluggish demand for finished steel suggests a cooling off period for raw material prices in the coming weeks.
Market Impact
○ Impacted Metals: Ferrous Scrap (HMS, E3 grade, steel scrap)
○ Direction: Mixed
○ Time Horizon: Near-term
○ Affected Industries: Steel Manufacturing, Construction, Automotive, Infrastructure
○ Related Price Reports: Stainless Steel Weekly Price Report
○ Watch Item: Monitor the balance between summer scrap collection rates and finished steel demand as mills determine their procurement needs for Q3.
SuperMetalPrice Commentary:
The divergence between domestic scrap strength and weak finished steel demand signals a precarious environment for steelmakers. While supply constraints and logistics continue to provide a floor for scrap prices, mills are increasingly sensitive to borrowing costs and liquidity. We expect traders to prioritize short-haul domestic movements over deep-sea exports until regional inventory gaps close or global demand for construction-grade steel rebounds.
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