EU scrap restrictions 'threaten established trade'

The European Commission's proposed restrictions on ferrous scrap exports to non-OECD countries would disrupt long-established trade flows to major steelmaking markets, an industry body has said.

The commission has published a draft list of non-OECD countries that would be authorised to import specified non-hazardous waste from the EU after 21 May 2027. Major ferrous scrap importers Egypt, Morocco, India, Pakistan and Bangladesh are not currently authorised to receive EU ferrous scrap under the draft. A public consultation on the draft list is running until 16 October.

The Bureau of International Recycling (BIR) has warned that the commission's draft delegated act under the EU Waste Shipment Regulation could seriously disrupt global recycling markets. It urged industry associations, businesses and governments to submit factual corrections, evidence and practical examples during the consultation.

The effect of the restrictions, if adopted, would vary considerably by market. Some destinations have already shifted away from European supply, while others would have to make substantial changes to their ferrous scrap sourcing.

Morocco, Egypt highly exposed

Among the most exposed are Morocco and Egypt, whose steelmakers rely heavily on scrap-based production and export finished steel to the EU.

A Moroccan mill told Argus that restricting EU scrap exports could undermine the bloc's wider decarbonisation objectives by making lower-emission steelmaking more difficult. The lack of domestic natural gas also limits the potential for DRI-based production, it said.

Morocco is particularly dependent on nearby supply, partly because of port handling restrictions. A local steelmaker said the UK would be one of its principal alternative scrap sources if EU material became unavailable, although it was concerned that the UK could eventually introduce similar measures.

Primary metallics such as DRI and pig iron would provide only limited substitution, with the mill estimating that they could account for a maximum of around 20pc of its metallic charge because of its electric arc furnace's (EAF) technical parameters.

Egypt could also turn increasingly to the UK and US, which already supply the country, while Russia and the Americas could provide additional volumes. Russian supply is currently constrained by export quotas and shipping difficulties, which increase freight costs and delivered prices.

UK supply could increase, given the country's comparatively low domestic scrap consumption, although additional demand is expected when Tata Steel's new EAF in Wales comes on line.

Egypt imported 2.89mn t of EU-origin ferrous scrap in 2025, accounting for almost 80pc of its total scrap imports, GTT data show. EU-origin imports were 501,000t in the first half of 2026.

South Asia already diversifying

South Asian importers are less dependent on EU supply and already take scrap from a considerably wider range of origins.

India and Pakistan combine European and UK supply with material from the US, UAE, Asia and elsewhere. India in particular has a highly diversified supplier base, potentially giving buyers greater scope to replace EU volumes.

Bangladesh provides the clearest example of a market that has already shifted almost completely away from European supply (see table).

At the same time, Bangladesh sharply increased purchases from Asian and other deep-sea suppliers. Japanese shipments rose from 383,000t in 2022 to 1.36mn t in 2025, while Australia supplied 762,000t and Singapore 534,000t that year. The US remained another major supplier at 1.33mn t.

Scrap that can no longer be exported to affected non-OECD markets would meanwhile have to find alternative outlets, potentially increasing availability within the EU and in other accessible export markets, including Turkey.

By Katya Ourakova