Global scrap prices saw a notable drop by the end of April 2025. Major markets in Europe, the U.S., China, and Turkey have experienced sharp reductions. These shifts are largely influenced by changes in purchasing behavior, with key buyers like ArcelorMittal and other steel producers adjusting their strategies.
Key Factors Behind the Price Drop
European Scrap Market Decline: In Europe, the prices of HMS 1/2 (80:20) steel scrap fell by $45 per ton, reaching $310 per ton FOB Rotterdam between April 1 and April 24. A 20% reduction in ArcelorMittal’s purchases caused this drop, as the company is the largest buyer in the region. Additionally, several Italian steelmakers suspended purchases due to lower rebar sales in April. Factory warehouses were already full, further pushing scrap prices down by an average of $11 per ton.
U.S. Scrap Prices Drop: In the U.S., HMS 1/2 (80:20) scrap prices also saw a significant fall. By April 24, prices dropped by $47 per ton, reaching $304 per ton FOB East Coast. The decline was driven by decreased demand for scrap, despite high finished steel prices. U.S. electric arc furnace mills are now asking for lower scrap prices, especially as iron ore prices continue to decline.
China’s Scrap Price Adjustment: China, a major consumer of scrap, saw a reduction in prices as well. By April 18, the price for HMS 1/2 (80:20) scrap in China dropped to $326 per ton CFR, from $344 per ton earlier in the month. This decline is due to a reduction in production at electric power plants, which led to fewer scrap purchases. The decrease in rebar production in the first quarter of 2025 also played a role in lowering scrap demand.
Turkey’s Scrap Market and Rebar Production Impact: In Turkey, scrap prices fell by $49 per ton, settling at $331 per ton CFR. Turkish rebar mills are increasingly opting for cheaper billets from third-party producers rather than scrap. This shift, combined with trade wars and reduced Asian steel exports, led to lower scrap demand. As Turkish steel companies halted purchases, scrap prices fell even further, contributing to the broader global price decline.
Global Impact of Scrap Price Decline
The fall in scrap prices across key markets signals ongoing challenges in the global steel industry. ArcelorMittal and other steelmakers are adapting to fluctuating raw material costs. These price reductions could prompt steelmakers to alter their production strategies in response to changing market conditions. As steel companies adjust their sourcing strategies, we may see further shifts in scrap prices in the coming months.
While falling scrap prices bring some relief to rebar producers, continued market uncertainty is expected. This uncertainty will likely influence steel pricing strategies in the near future, with fluctuations in global scrap prices likely to continue affecting the market dynamics.
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