The global ferrous scrap market is treading water in July 2026. Turkish HMS 1/2 80:20 remains range-bound in the mid-$300s per tonne CFR, with analysts expecting the $350-380/t band to persist through 2027. Turkish mills successfully pressured prices down by $6-13/t from European and US origins in June, but the overall export market has not shown much movement. US exports to Turkey grew 34% year-on-year to 1.41 million tonnes in Q1 2026, solidifying America's position as Turkey's top scrap supplier.
Asia tells a softer story. Imported containerized HMS 1/2 80:20 into Taiwan fell $10/t in the first half of July to $325/t CFR, according to Argus Media data. Vietnam's assessment eased further to $377/t CFR over the same period, with mills prioritizing domestic scrap procurement and buying seaborne material on a hand-to-mouth basis. Chinese domestic heavy melt scrap (>6mm) in East China declined by 36 yuan/t to CNY 2,177/t before showing signs of stabilization as steel prices rebounded and mills restocked low inventories.
The regional divergence is driven by weather and construction cycles. Monsoon and rainy season conditions across Southeast Asia have suppressed construction activity, reducing rebar demand and consequently scrap consumption at EAF mills. South Korea's ferrous scrap imports fell roughly 15% year-on-year in the first half of 2026, driven by lower steel output and a price gap favoring domestic material. Taiwan's imports declined 25% in the first five months.
In the United States, the scrap market remains stubbornly stable. RMDAS data shows No. 1 HMS and shredded scrap moved only $3/t and $1/t respectively between May and June, with the prompt industrial composite (busheling and bundles) trading in a narrow $465-471/t band since February. Analysts describe the market as undervalued relative to HRC, but new European swing tons and EU output cuts are creating oversupply pressure that caps US prices.
Western European contract scrap prices fell approximately EUR 25/t going into late June, with the German market expecting low activity through July. This European oversupply creates what Recycling Today calls swing tons — cargoes that flow from European suppliers to Turkish mills when the arbitrage opens, competing directly with US-origin scrap. The data confirms this: US exporters managed only partial success in pushing prices higher, with Turkish mills waiting out sellers and trimming HMS 80/20 by $6-13/t from both EU and US origins in June.
The structural shift toward EAF steelmaking is the defining long-term theme for scrap markets. In the US, EAFs now account for over 70% of steel production, and the share is rising globally as decarbonization pressures favor scrap-based routes over blast furnaces. Vietnam's EAF capacity of 17.6 million tonnes is growing at 8% annually, with scrap providing over 90% of metallics. This structural demand growth is the main bullish argument for scrap prices, but it is being met by equally structural increases in scrap collection and availability. The EU is expected to increase scrap collection from 87 million tonnes in 2025 to 95 million tonnes in 2026, providing sufficient feedstock to meet rising EAF demand without triggering a sustained price rally.
Grade spreads remain structurally wide. US shredded auto scrap commands around $415/t while HMS 80/20 trades near $285/t — a $130/t gap driven by EAF mill preferences for clean, low-residual feed. Turkish mills consistently pay about $20/t premium for shred over HMS 80/20, compared with only $5/t in South Asian markets. This premium is entrenched rather than cyclical, as EAF steelmaking's growing share of global output makes residual-sensitive procurement a permanent feature of the scrap market.
The structural outlook offers no strong case for a price breakout in either direction. Steelonthenet projects Turkish HMS 80/20 in the $350-380/t range through 2026-2027. Sims Metal CEO Stephen Mikkelsen noted that 'China will continue to dampen steel prices, and therefore ferrous scrap prices outside the US,' a view echoed by Argus Media. Rising scrap supply from increased EAF adoption globally is broadly expected to offset rising demand, keeping the market in balance. The BIR World Mirror for July 2026 characterized the summer market as balanced, with no strong case for either a spike or collapse.
For EAF mills, the current environment favors hand-to-mouth or short-cycle buying rather than large forward coverage. Asian import prices have room to ease further if weather-related demand weakness persists through August, so avoid locking in seaborne volumes at current levels. In the US and Europe, domestic prices are broadly stable; focus on maintaining secure flows of prime and shredded grades where structural premiums over HMS are entrenched and unlikely to narrow. For deep-sea exporters, competitive offers around mid-$300s/t CFR Turkey and low-$300s/t CFR Taiwan will be needed to move volume through August. Monitor European CBAM implementation closely — reduced EU import quotas from July 2026 could accelerate EAF adoption and eventually tighten global scrap supply, though that is a 2027 story rather than a Q3 2026 one.