United Kingdom

Material continues to be in tight supply across the UK market, with most operators reporting incoming supplies at low levels. We have seen price reductions into both the domestic and dockside markets over the last couple of months as export levels were reduced by around US$ 20-30 per tonne on the back of poor steel demand and lower outputs from the mills. The EU long products market is continuing to suffer from low demand and high costs, and there is a view that 2025 could see a cutback in output which would affect prices for raw materials domestically.

Despite the gloomy outlook for the European steel sector, Turkish mills have re-entered the market over the last couple of weeks and have been buying a number of cargoes. This has led to prices on exports increasing US$ 10-15 per tonne to low-US$ 350 levels for HMS from the mid to high US$ 330s. There has been an adjustment to dockside prices, leading to pressure on domestic consumers to accept increases to meet these new levels. Some of the dockside operators have been particularly aggressive in increasing prices above market movements in what is a clear attempt to secure tonnage. Competition remains fierce across the shredders, with margins wafer thin as operators look to secure material.

The big uncertainty in the market, however, is the announcement by the Trump administration of 25% tariffs on steel imports into the USA. What will be the impact? There are two camps on this: one saying this could lead to price increases and the other saying reductions. If these tariffs are implemented, this will lead to imported steel into the USA being expensive and thus to greater demand for US steel; domestic mills will need to increase production as a result, thereby boosting their demand for recycled steel and reducing the volumes available for export. This would create a shortage of material on export markets and therefore push up prices.

The flip-side to this argument is finished steel destined for US markets will be diverted to already-saturated markets elsewhere, thus further depressing prices and reducing production which will in turn create less demand for recycled steel and push prices lower. At present, we watch with interest to see exactly what the USA does and what measures other countries might implement in retaliation.

In summary, the outlook is uncertain. But regardless of all the macro and geopolitical issues we are currently experiencing (including the ongoing push for export restrictions), recycled steel will continue to experience healthy demand in the long term as the steel sector strives to meet its CO₂ targets.