Recycled Steel Price Drops Signal Shifting U.S. Scrap Market Dynamics

Recycled Steel Price Drops Despite Strong Steel Production

Recycled steel price drops defined the U.S. scrap market in late March and early April. Data from Raw Material Data Aggregation Service (RMDAS) confirmed declines in obsolete scrap grades. Steel mills paid $15 to $20 less per ton during this period.

Obsolete grades saw the sharpest correction across national averages. No. 2 shredded scrap fell by $17 per ton. Meanwhile, No. 1 heavy melting steel dropped by $21 per ton. The latter averaged $387 per ton in mill purchase prices.

However, prompt industrial scrap prices held steady during the same timeframe. Grades such as No. 1 busheling and bundles maintained prior levels. This divergence highlights uneven pressure across scrap categories.

Supply Recovery Drives Recycled Steel Price Drops

Supply-side recovery played a central role in recycled steel price drops. Scrap inflows increased as winter disruptions eased across the United States. Demolition and construction activity rebounded, boosting obsolete scrap availability.

At the same time, domestic steel demand remained firm. The American Iron and Steel Institute reported production at 1.848 million tons for the week ending April 18, 2026. This output marked a 9.7 percent increase year over year.

Mill utilization also reached a notable milestone. Capacity climbed to 80 percent, aligning with federal industrial targets. Despite these strong indicators, higher scrap supply pressured pricing downward.

Export Weakness Adds Additional Pressure

Weak export demand further amplified recycled steel price drops. BigMint Technologies reported a 16 percent decline in U.S. ferrous scrap exports in 2025. Total volume reached just 12.1 million metric tons, the lowest in over two decades.

Key export markets contracted sharply during the year. Turkey demand fell by 14 percent, while Bangladesh dropped 29 percent. Mexico recorded a steep 45 percent decline, with Taiwan and India also weakening.

Market participants also cited geopolitical uncertainty as a factor. Ongoing disruptions in the Middle East continue to impact global scrap flows. As a result, export channels remain unstable heading into mid-2026.

Industry voices questioned the pricing trend despite firm fundamentals. Executives noted that mill outages remained limited and short in duration. Meanwhile, major producers continued raising finished steel prices, adding further complexity to the pricing environment.

SuperMetalPrice Commentary:

Recycled steel price drops reveal a classic imbalance between supply recovery and demand resilience. While U.S. mills operate at strong capacity, excess scrap inflows and weak exports weigh on pricing. If global trade stabilizes, scrap prices could rebound quickly. However, sustained supply pressure may cap near-term upside. Market participants should closely monitor export demand and geopolitical developments.