Europe's scrap demand set to surge as new EAFs loom: Eurofer

Europe's transition toward more electric steelmaking, with up to 20 electric arc furnaces expected to be commissioned in 2026-2030, adding 34 million-44 million metric tons of steel capacity, will increase the need for ferrous scrap, especially for high-quality material, the European Steel Association told Platts, part of S&P Global Energy.

In 2025, the EU steel industry consumed 74.4 million mt of ferrous scrap. Its H1 2026 intake of 38.1 million mt has kept EU steel production and ferrous scrap utilization broadly in line with the first half of 2025, but Europe's accelerating transition toward more electric steelmaking will trigger a surge in the EU's steel scrap demand, according to Eurofer.

Based on announcements by EU steel companies, 20 new EAF projects are expected to be commissioned between 2026 and 2030, representing 44.1 million mt/year of capacity. Of this, 33.8 million mt/year capacity is progressing; the remaining 10.3 million mt/year is delayed or suspended, said the steel body's head of communications, David French.

The projects illustrate the scale of the potential transformation of European steelmaking, but their actual output will depend on market conditions and on whether individual investments proceed, French said. Also, these figures should not be interpreted as 44.1 million mt of additional annual scrap demand, he added — they represent steelmaking capacity, not actual production or scrap consumption.

The transition will not depend on scrap alone. Eurofer is tracking 13 direct reduced iron projects planned for 2026-2030, representing 26.9 million mt/year of DRI capacity, of which 17.2 million mt/year is progressing and 9.7 million mt/year is stalled. There is also one electric smelting furnace project, representing 2.3 million mt/year of hot-metal capacity.

This means Europe's future steelmaking system will use a combination of scrap and primary iron units, rather than simply replacing today's production with 100% scrap-based EAF output. But there won't be a uniform European scrap-to-DRI ratio: mixes will be plant-specific with EAFs operating on a spectrum ranging from near-100% scrap to 50:50, or even DRI/hot briquetted iron-dominant blends, French said.

The ratio will be driven less by the EAF itself and more by scrap and DRI/HBI dynamics — such as quality, availability, and price — alongside product mix, utility and hydrogen costs, and carbon economics. Ultimately, the ratio will represent a balance between securing product quality and project profitability, according to Eurofer.

Based on a 50:50 scrap-to-other-metallics ratio and the and an 80% utilization of the 33.8 million mt/year of EAF capacity that is being built, 27 million mt actual steel production will require 14.2 million-14.8 million mt of steel scrap and 14.2 million-15 million mt of DRI/HBI, with the results adjusted for the amount of feedstock lost during the melting process, given EAF operations' typical metallic yield of 90%-95%, according to Platts, part of S&P Global Energy.

Stanislav Zinchenko, CEO of Kyiv-based think tank GMK Center, said the EU's need to grow crude steel production by 12%-13% to counter falling imports triggered by steel safeguards and the Carbon Border Adjustment Mechanism, alongside the rollout of new EAFs, will require an additional 8 million-11 million mt of steel scrap.

The European Commission is looking to reduce EU annual exports of steel scrap by 4 million-4.1 million mt, or 25%-26%, from 2025 levels. In its draft delegated act under the Waste Shipment Regulation, released Sept. 18, the commission proposes cutting off the majority of non-OECD countries from EU scrap metal supplies as of May 21, 2027.

"We don't yet have an agreed position, but it is worth noting the following: 32 non-OECD countries applied [to the commission] to continue receiving EU waste; 24 applications covered metals, but only five were accepted," Eurofer's French said. "However, the majority of EU [ferrous metal] waste exports, around 72%, currently go to OECD destinations, and 64.4% of that OECD flow goes to Turkey. This wider picture matters when assessing how much scrap the European Commission's measure could actually retain within the EU and what effect it could have on the European scrap market."

Platts assessed shredded scrap prices in Southern Europe at Platts at €325/mt ($369/mt) at the beginning of September; the monthly assessment increased by €10/mt, or 3%, since early January and is €15/mt, or 5%, higher year over year.

On Sept. 29, Platts assessed the HBI price, including freight cost of delivery to a port in the Mediterranean region, at $396.50/mt CFR Mediterranean; the daily assessment gained 13% from the year-start point of $350/mt and is 25% higher than its $318/mt year-ago level.