Tight supply poised to keep recycled steel prices buoyant

Financial press outlets and pricing and business information services have been reporting this week that United States processing and trading sources are confident the March domestic mill buying season will result in more price gains for ferrous scrap.

In the previous two buying periods, waves of severe winter weather caused reduced generation and collection of recycled steel, allowing shippers to ask more per ton for scrap that was, in the case of some mills, needed to restock their inventories at the start of a new year.

If mills and foundries pay more for their scrap this spring, weather seems less likely to be the culprit. That leads sellers, buyers and observers to figure out if supply is remaining tight for economic reasons or if demand has strengthened compared with several months earlier.

The U.S. economic outlook in early 2025 has been murky for several reasons, but some of the murkiness starts at the top—in the White House.

After a recycling company executive expressed his dismay about back-and-forth tariff policies to Recycling Today in February, a supplier to the metal recycling sector has expressed a similar sentiment in March.

“Everyone I talk to is just frustrated with the back-and-forth statements and shifting deadline dates,” he comments. “How do you conduct transactions let alone make investments in that environment?”

Business planners seem to have expected a turbulent transition from the prior presidential administration to the current one, with several January economic indicator-related surveys and statistics pointing in the downward direction. 

As of early March, neither the tariff uncertainty nor a lukewarm export market for American recycled steel have dimmed expectations of upward price momentum for recycled steel.

On the export front, pricing service Davis Index has reported that mills in Turkey purchased 60 percent less imported scrap from the U.S. this January compared with January 2024. That has helped lead to import prices that are not moving upward there so far this month.

Offering better news this week, Davis Index is listing shredded scrap as selling at an average of $431 per ton to domestic mills in the U.S. currently, holding onto price gains that have accrued throughout the year.

Mill transaction figures gathered and aggregated by the Raw Material Data Aggregation Service (RMDAS) of Pittsburgh-based MSA Inc. show its No. 2 shredded scrap grade having moved beyond the $400 per ton threshold this February for the first time in 10 months.

Sellers, buyers and processors of ferrous scrap likely will be watching the news with particular attention this spring as they try to gauge the health of both the domestic steel industry and the overseas trading sector.

While domestic steelmakers want tariffs to supply them with a bigger piece of the pie, historically the question can become whether the size of the overall pie begins to shrink.

Through the first two months of 2025, the Washington-based American Iron and Steel Institute (AISI) says year-to-date steel production has checked in at 14.18 million tons. That figure is down 1.3 percent from the nearly 14.4 million tons made during the same period in 2024.