United States

After a brief rally in the first quarter of 2025, US recycled steel dealers saw several consecutive months of price erosion as mills took back everything they had given. April and May saw consecutive price cuts of US$ 40 per ton after dealers had gained almost US$ 80 at the beginning of the year. Prices entering June trading were comparable to those at the beginning of the year and now appear to be holding at those levels.

The summer doldrums appear to be in full control as, temporarily, US recycled steel prices seem to have found both a floor and a ceiling. In June, recycled steel dealers and mills saw little need to change pricing; trade discussions were among the shortest in recent history as all agreed to keep prices steady. While mill activity remained healthy with capacity utilisation rates just under 80%, there was also enough recycled steel in the market to meet demand. Exports did not provide any support to US dealers as prices were also flat in a market that appeared to be balanced. Despite a slight tightness in recycled steel availability, international demand remained weak - as evidenced by Purchasing Managers’ Indexes that remained below 50 (in contraction) in the major US recycled steel-consuming countries such as Turkey, Taiwan and Mexico. Weak summer demand is the theme that best describes the USA and most of the international market.

In June, the Trump administration increased the steel tariff from 25% to 50%. That in turn created some additional business at US steel mills as consumers and service centres moved some orders from imported steel to domestic production. The US steel capacity utilisation rate held strong at just under 80%. At the same time, hot rolled coil (HRC) saw a change in its falling price trend: having peaked at close to US$ 950 per ton, HRC had slid below US$ 900 by early June but then rallied to just above US$ 900 after the tariff increase. Recycled steel dealers thought there might be an opportunity to share some of this additional margin in July on the assumption that flows would be slowing in the summer heat, but this did not prove to be the case.

Recycled steel flows did not ebb as much as dealers had anticipated, with most of them seeing similar volumes in June as in May. In addition, some mill outages in July (planned and unplanned) removed production. Once again, the market was in balance with a combination of weaker exports and limited summer demand. For a second consecutive month, US recycled steel trade negotiations were completed quickly at the sideways level. Indeed, for the first time in recent memory most deals were concluded before the July 4 holiday.

While US production has remained healthy on the back of the 50% tariff, the missing element is still consumer demand. Most US economic indicators, such as retail sales and consumer confidence, paint a picture of slowing consumption. While a recession does not appear imminent, consumer demand both in the USA and internationally is both weak and trending lower. Some of this is seasonal weakness but there is also a market uncertainty effect. The Trump administration’s 90-day trade reprieve ends in August and the uncertainty entailed continues to be a factor in market weakness. Consumers appear to be planning for the worst through reduced purchases. While steel mill activity is currently good, we need the consumer to keep that trend alive. Currently, that is not what we are seeing on the horizon. While the economics are not strong, they are also not that weak; in the US market and abroad, recycled steel export prices have come off their highs but are not collapsing. They appear to be reflecting a seasonal market weakness rather than a march into recession.

That sets the stage for what could be a protracted period of range-bound prices. HRC close to US$ 900 and recycled steel near US$ 400 is not a recipe for disaster. Mills and dealers have enjoyed both steady business and market liquidity, and there’s nothing wrong with that scenario.

But what of the next chapter? For now, it appears that the third quarter in the USA will be relatively quiet, with little driving prices either higher or lower. For recycled steel dealers, the expectation is that less material will support future prices in a supply-driven market. Summer temperatures are rising in the USA and the heat may be a factor affecting collections in July and August. If that is the case, it may give dealers some leverage by the end of the summer. On the other side of the equation, consumer weakness does not bode well for future new steel demand.