The Ferrous Scrap Market in 2024: Global Dynamics and Future Prospects

The global scrap metal market is going through a phase of change in 2024, with divergent trends characterizing the major players in the industry.

The October 2024 quarterly report published by the Bureau of International Recycling (BIR) provides an overview of supply and demand dynamics in several key markets, highlighting economic and geopolitical factors that are affecting trade flows and prices.

China Continues to Dominate Scrap Consumption

Despite a 1.1 percent decline in crude steel production, China remains the world’s leading consumer of scrap metal. In the first six months of 2024, China’s scrap consumption reached 122.54 million tons, up 5.4 percent from the same period a year earlier.

This increase reflects the country’s commitment to using recycled materials to support its emissions reduction ambitions and reduce dependence on virgin raw materials.

However, China has also increased its exports of semi-finished and finished products, a move that is destabilizing the scrap market in Asia. Indeed, China’s steel exports have reduced demand for scrap in other Asian countries, which are reassessing their purchasing strategies.

This phenomenon has contributed to the decline in scrap imports to South Korea and Taiwan, by 45 percent and 11 percent respectively in the first eight months of 2024.

South Korea and Taiwan: Evolving Merger Strategies

Decisions by major Asian consumers, such as South Korea and Taiwan, to drastically reduce their scrap imports stem primarily from China’s increased exports of semi-finished products and the availability of cheap Russian billets.

This development has prompted many countries to opt for cheaper alternatives to scrap melting, thereby reducing demand for bulk and container scrap.

Bangladesh and Japan: Stable and Declining

The Bangladesh market scrap has been relatively stable, protected from the direct impact of exports of semi-finished and finished products.

However, in August, Japan experienced a significant decline in scrap exports, down 13 percent both year-on-year and month-on-month, marking a significant setback in a market that, until recently, was among the region’s leading scrap exporters.

This decline represents the first time in four months that Japanese exports have fallen below 500,000 tons, signaling a slowdown in industrial activity.

The European Union: Growth in Consumption and Contraction of Exports

In the European context, the EU-27 countries showed an 8.8 percent increase in scrap consumption in the first half of 2024, with a total of 43.61 million tons consumed. This increase comes amid efforts to improve production efficiency and increase the use of recycled materials to reduce carbon emissions.

On the other hand, scrap exports from the EU decreased by 18.7 percent to 7.36 million tons. The decline in exports could be partly attributed to high inventories of semi-finished and finished products, which reduced demand for new materials.

The German Case: Falling Prices and Reduced Production

In Germany, the EU’s largest steel producer, scrap prices fell sharply in September. This was largely due to the decision by some consumers to reduce production or cut shifts in response to the buildup of finished goods inventories.

This reduction in industrial production had a significant impact on scrap prices, reducing demand for recycled materials and creating an oversupply in the market.

Turkey Maintains Primacy as Scrap Importer

Turkey maintained its status as the world’s largest importer of scrap metal, consuming 15.71 million tons in the first half of 2024, marking a 13.1 percent year-on-year increase.

Turkey’s scrap imports increased by 3.6 percent to 9.98 million tons, consolidating the country’s crucial role in the global scrap market. This increase reflects Turkey’s importance as an industrial hub, able to absorb large volumes of scrap to support its steel production.

United States: A Stable Market but with Prospects of Rising Prices

In the United States, scrap exports decreased by 16.4 percent in the first half of 2024 to 7.19 million tons. However, the country remains the second largest exporter of scrap in the world, just behind the EU.

Scrap prices in the U.S. have remained relatively stable in recent months, but are expected to rise toward the end of the year due to reduced collection activities over the holiday period.