Tighter domestic steel policies bear down on markets

Greater controls on scrap exports and broader efforts to protect domestic steel manufacturers have been cited in the latest ferrous market outlook from the Bureau of International Recycling.

The global recycling organisation’s latest Mirror report is headed by Shane Mellor, president of the ferrous division. He notes that trade policy is increasingly shaping market dynamics. Safeguard measures, anti-dumping actions, carbon-related mechanisms and broader industrial strategies are ‘reshaping’ competitive positions and influencing investment decisions throughout the steel value chain.

‘Despite these challenges, the long-term fundamentals supporting recycled steel remain strong,’ he asserts. ‘The steel industry’s commitment to decarbonisation, the continued expansion of electric arc furnace capacity and the growing recognition of recycled steel as an essential circular raw material continue to reinforce its strategic importance.’

‘Around the world, policymakers and manufacturers are placing greater emphasis on resource efficiency, supply security and sustainability – areas in which recycled steel plays a pivotal role.’

Policy intervention

The regulatory theme is echoed by fellow board member Michael Gaylard from Sims in the USA who believes policy intervention has become an increasingly important driver of global steel markets in 2026.

‘Measures designed to protect domestic producers and promote local steelmaking are beginning to improve mill utilisation in several regions, partially offsetting weak end-use demand. While these policies are unlikely to reverse broader market challenges in the near term, they should provide a firmer foundation for domestic steel production and support a gradual recovery in recycled steel demand as market conditions improve.’

Indian growth

Sanjay Mehta, giving the Indian perspective, says market conditions are expected to improve gradually during the third quarter amid strengthening construction activity, infrastructure spending and manufacturing demand.

‘Indian steelmakers are expected to gradually increase procurement as finished steel demand strengthens and inventories require replenishment, although purchases are likely to remain production-driven rather than speculative.
‘The long-term outlook for recycled steel remains favourable.’

‘Expanding infrastructure investment, growing electric arc furnace capacity and continued implementation of the Vehicle Scrappage Policy are expected to support higher domestic consumption. However, domestic generation is still insufficient to meet industry requirements, ensuring imported recycled steel remains an important component of India’s metallics basket.’

German picture ‘challenging‘

The environment for the German recycling industry, according to Denis Reuter, is set to remain challenging in the second half of the year.

‘The EU’s new protective measures are likely to improve capacity utilisation at European steelworks and thus, in principle, underpin demand for recycled steel. At the same time, the weak industrial economy, seasonally declining recycled steel inflows and persistent logistical bottlenecks are limiting the market’s potential. Additional uncertainty is stemming from the volatile performance of the Turkish deep-sea market and geopolitical risks.

‘For recyclers, security of supply, efficient logistics and the ability to adapt to market conditions are increasingly becoming the decisive competitive factors.’

UK nationalisation

Tom Bird, for the UK, highlights the impending nationalisation of British Steel, which is currently operating under government control. The required Parliamentary legislation is nearly complete.

‘There has also been speculation that Liberty Steel could face nationalisation, although this remains far from certain,’ Bird says, adding there could be a significant delay to the installation of the new electric arc furnace at Tata Steel’s Port Talbot works.

Commissioning was originally scheduled for the end of 2027 but concerns over an adequate electricity supply is insufficient to support the new furnace mean commissioning could be postponed until well into 2028.