A proposed 30pc tariff on US imports of European scrap could deal another blow to electric arc furnace (EAF) steelmakers' iron metallics supply chains.
US president Donald Trump threatened on 12 July to impose steep blanket tariffs on imports of all European goods, effective 1 August. The Netherlands, Poland and Sweden are major suppliers of prime scrap to the US.
US steelmakers, already preparing for a 50pc tariff on Brazilian pig iron, would face dwindling options for sourcing essential iron metallics and clean scrap units if both the European and Brazilian tariff threats are implemented next month. The combination could shock the domestic ferrous scrap market in the coming months as mills are forced to rejig their international and domestic iron metallic and prime scrap supply chains.
Steelmakers have largely been able to brush aside the bottom-line impacts from the White House's 5 April implementation of 10pc reciprocal tariffs on iron metallics imports from the continent, but the new elevated rates could stifle flows to the US, according to market participants.
European prime scrap has accounted for 28pc of all US prime scrap imports through May this year, according to US customs data. US steelmakers imported 222,000 metric tonnes (t) of European prime scrap over this period, up 94pc from the prior year.
The European tariff announcement came on the heels of the proposed 50pc tariff on Brazilian goods, which would include pig iron. Brazil is the largest single supplier of pig iron to the US and since 2024 it accounted for nearly 70pc of all shipments to the US, according to US customs data.
Seaborne prime scrap bulk cargoes are a natural pivot for US EAF sheet mills trying to substitute a portion of their monthly pig iron supply, but options are limited. US mills would have to increase their seaborne consumption of prime scrap from Canada, Mexico or the UK to offset a portion of the drop.
Canada is the largest source of imported prime scrap to the US, at around 31pc through May this year, followed by Mexico at 28pc. But steep tariffs on steel and auto imports from both countries have likely slowed manufacturing and busheling generation. Mexico's industrial production rose by 0.6pc in May from April, driven by a rebound in construction activity but additional tariffs pose a fresh risk to its recovery.
The UK is the third largest single source of seaborne primes to the US, at around 13pc of total imports over the same period. But it is unlikely that the UK could offset the potential drop in the European shipments because of its manufacturing footprint and regional competition for prime grades.
