Ferrous scrap supply squeeze said to have peaked

Upward pressure on recycled steel prices in the United States that have characterized that market in the past three months, according to a U.S.-based metals recycling executive.

Writing for a recent Bureau of International Recycling (BIR) “World Mirror on Ferrous Metals,” CEO George Adams of California-based SA Recycling says the capacity rate of electric arc furnace (EAF) mills in the U.S. “appear to be reaching an apex,” citing that as one of several factors that could cause recent price increases to stall.

Last December and this January, “Mills could easily afford to pay the higher [scrap] prices to help keep the upward momentum in new steel prices and secure badly-needed recycled steel,” says Adams of conditions a few weeks ago. “Limited inventories were also the underlying factor allowing mills to increase lead times and continue to raise new steel prices,” he adds.

On the supply side, Adams describes winter weather in the U.S. as having become “the dominant factor” in the market in early 2026. “U.S. recycled steel yards have been intermittently closed as far south as Texas owing to winter storms, thus impeding intakes of obsolete grades,” writes Adams in a report to fellow members of the Brussels-based BIR.

Demand side upward price pressure came not only from the healthy EAF sector in the U.S., but also from export order levels Adams says “continued [their] slow rise, with healthy demand from Turkey on winter supply tightness.”

Heading toward March, though, Adams writes, “Real new steel prices have slowed their rise and are hovering slightly above $950 per ton. Exports, while still seeing demand, are also faced with prices that are becoming unsustainable versus the price of new steel sales in other countries. Furthermore, imported new steel into the U.S. has now become more attractive, at lower prices, to its domestic alternative.”

A prolonged thaw also could improve scrap generation and flows in the U.S., says the executive. “Recycled steel intakes will no doubt start to improve as the weather permits, especially at current price levels. More availability will weigh on recycled steel prices into the second quarter,” he predicts.

Fellow BIR “World Mirror” contributor Michael Gaylard, who works from the U.S. for Australia-based Sims Ltd., has provided additional detail about the 2025 demand situation in recycled steel export destination countries.

Gaylard characterizes the Southeast Asian market for imported recycled steel as subdued while India and neighboring nations have maintained a more vigorous appetite.

“Traditional recycled steel-consuming countries such as Thailand, Vietnam, Indonesia and Malaysia have seen no material change in demand as abundant alternative materials continue to limit shifts in purchasing behavior,” he says of Southeast Asia in 2025.

“Bangladesh maintained steady demand for imported recycled steel, with total imports rising 3.4 percent year on year to 5.34 million metric tons despite subdued market sentiment in the second half of the year,” writes Gaylard.

“India’s steel demand expanded steadily in 2025, driven by construction, infrastructure and automotive activity [while] recycled steel imports increased modestly to 7.99 million metric tons,” he says of that nation.