United States

In the spring, the US recycled steel market was showing signs of traditional seasonal changes. As supplies increased with the warmer weather, prices saw a slight contraction in April. While some saw this as a sign of what was to come based on both market volatility and uncertainty, it was the last price drop for recycled steel leading into July.

New steel prices remained on an upward trajectory, inventories stayed low and lead times for new steel continued to increase. In turn, recycled steel flows remained consistent. While dealers would have liked some of that increased mill margin, they were content to see recycled steel prices stay flat in both May and June.

That led some to believe that we could be in for a repeat of 2025 when recycled steel prices held steady for the three summer months of June, July and August. While dealers would be happy with that, the market is now showing signs of traditional summer softness. This is more than evident in recycled steel export prices having continued to fall over the last month. Weaker summer demand saw export prices drop on both US coasts, which is not uncommon for this time of year. The concern for US dealers will be whether this is enough to affect US recycled steel prices going into July as that material becomes more valuable to exporters in the US domestic market. 

Markets have seen a heightened level of uncertainty owing to the Iran conflict and the volatile price of oil. Less than a month ago, oil was averaging over US$ 90 a barrel and straining US consumers with higher prices for gasoline and most other daily necessities. Economic data in turn showed signs of a slowing US economy based on the elevated levels of inflation. While the economic scenario showed weakness, the US consumer seems to have missed the news and has remained resilient.

Demand in the USA has continued to be healthy despite these elevated prices. This was evident in continued demand for new steel despite price increases. In turn, new steel inventories remained low while lead times stretched out. 

Steel mill capacity utilisation had held steady at slightly over 80% for some time - a level both higher than in 2025 and including additional mill capacity such that total net tons were even higher. While tariffs have played a part in additional demand for US steel, so has the boom in artificial intelligence and investment in new data centres. This additional demand has appeared to offset any reductions or slowdowns in the other steel-intensive industries like automotive. This has been reflected in both the rising price of new steel (hot rolled coil is now close to US$ 1150 per ton) and lead times for new steel stretching out to 12 weeks in some cases.

Consumers of new steel such as steel service centres have been competing for a limited number of tons in the spot market. Many are buying what is available rather than waiting for other options, thus continuing to give mills pricing power and in turn supporting recycled steel prices to date.

While this strong scenario for new steel is good news, nothing lasts forever and many analysts are now predicting that prices may be reaching their peak, with the potential for them to turn south as we move from the third to the fourth quarter. This in turn could have a negative impact on recycled steel prices but only to the extent that it doesn’t affect the intake flows needed to continue to support the higher new steel demand.

As summer heats up, recycled steel intakes weaken. There is currently a heat dome over the USA that will inevitably affect intakes in July. The real question is whether it will be enough to impact the tons needed by mills that are still running close to 80% capacity. While the US economy appears to be slowing, the level of steel demand in the USA is still good. Even if new steel prices come off later this year, the price of recycled steel never went up in stride with new steel prices. Mills are aware of available recycled steel supplies as they still need material to meet their higher new steel demand. The question is what the balance of supply to demand will be in July and moving forward.

Mills would certainly not pass up the opportunity to recoup margin from recycled steel, if they could. However, with no increase in recycled steel prices relative to the rise in new steel prices, how much is on the table for them to take? In dealers’ eyes, this amounts to little or nothing as their costs have increased significantly while the price of recycled steel has not. So even if new steel prices start to decline later this year, it should have minimal impact on recycled steel prices if supply is still in balance with, or less than, demand.

As the July market is just developing at the time of writing, most see a market in balance. While recycled steel prices are not expected to rise, they are also not anticipated to fall much either. This plays into the scenario of flat recycled steel prices for the summer - a level that most dealers could live with. In a world of uncertainty and instability, that wouldn’t be a bad outcome. We will see.