1. The State of Scrap Markets in 2026

Before mapping a growth strategy, you need an honest picture of where the market stands today.

Current Price Benchmarks (June 2026)

Material	US Price (USD/t)	EU Price (USD/t)	China Price (USD/t)
Steel scrap (HMS 80/20)	~410	~320	~230
Copper scrap	~12,800	n/a	~14,450
Aluminium scrap	~2,140	n/a	~1,930
Lead scrap	~1,600	~1,800	~1,950

Sources: Fastmarkets, GMK Center, BIR — June 2026 indicative data

The Three Macro Tailwinds

Tailwind 1 — Rising global scrap consumption. BIR data puts global scrap use at approximately 480 Mt in 2025, up ~4.5% year-on-year, even as overall crude steel production softened. The scrap intensity of steel production is structurally increasing. More mills are EAF-based; more governments are mandating higher recycled content.

Tailwind 2 — Green electrification driving non-ferrous demand. Electric vehicles contain roughly 3–4× the copper of a conventional car. Data centres consume enormous quantities of copper cabling and aluminium heat sinks. Utility-scale solar and wind installations require both metals in volume. Every gigawatt of new renewable capacity added means more scrap feedstock eventually re-entering the cycle.

Tailwind 3 — Tightening export restrictions. Approximately 48 countries — including the EU under its updated Waste Shipment Regulation — now impose meaningful restrictions on scrap exports. The EU limits exports to non-OECD countries unless strict environmental standards are met. India has restricted ferrous exports. This is constraining global supply flows and supporting domestic prices in restricted markets. If your yard is in one of those markets, tighter exports translate directly into tighter local supply — which means the processors and mills that need your material are competing harder to secure it.

Where Prices Are Heading

After a late-2025 lull — German HMS prices briefly fell to around €255/t — ferrous scrap has firmed into 2026. Turkey's HMS 80/20 is trading around €300–320/t; the US East Coast index is near $347/t at time of writing. Non-ferrous is following base metal cycles: copper spiked on supply tightness in mid-2026 while aluminium scrap demand has been steady, underpinned by automotive lightweighting.

The takeaway: markets are not in freefall. There is a real price floor driven by structural recycling demand. But margins are not automatic — they are earned through operational discipline and strategic positioning.

2. Build a Resilient Supply Chain

Supply, not demand, is the binding constraint for most scrap operators today. Locking in reliable, diverse, quality feedstock is the single highest-leverage thing you can do.

Diversify Your Collection Channels

Relying on one or two supplier types is a structural vulnerability. A robust collection network draws from multiple sources:

Industrial generators — manufacturers, fabricators, stamping plants, construction contractors. These generate consistent, high-grade scrap with predictable volumes. Build relationships at the procurement and operations manager level, not just with whoever answers the phone.
Demolition and infrastructure — urban demolition, bridge refurbishments, rail upgrades, and utility replacements produce large, concentrated volumes of both ferrous and non-ferrous material.
Automotive sector — end-of-life vehicles remain a major source of shredder feed, copper wiring, and aluminium castings. With EV adoption accelerating, the composition is shifting: more lithium-ion battery packs, more copper, slightly less cast iron.
Retail and consumer — lower margin per tonne but often counter-cyclical. Consumer electronics recycling, appliance take-back schemes, and municipal contracts provide volume stability.
Cross-border sourcing — in regions where exports are permitted, sourcing from neighbouring markets can offset domestic supply tightness. Monitor bilateral trade rules carefully.

Lock In Supply with Long-Term Contracts

Spot-only procurement makes you vulnerable to price spikes, competitor outbidding, and supply disappearing when you need it most. Move at least 30–40% of your volume onto structured agreements:

Floor-price arrangements — guarantee generators a minimum price tied to an index (e.g., Fastmarkets HMS) with a sharing mechanism above a threshold. You give up some upside; you get supply security.
Offtake agreements — commit to purchasing defined volumes from industrial partners over 12–36 months. Useful for large, consistent generators like steel service centres or aluminium die-casters.
Preferred supplier programmes — offer generators faster payment, free container drops, or value-added services (compliance reporting, weight slips) in exchange for exclusivity or first-right-of-refusal.

Reduce Logistics Dependency

High freight and fuel costs are eroding margins industry-wide. Strategies to reduce exposure:

Shorten your collection radius — focus on the highest-density generation zones within economic haulage distance. A tonne collected 20 km away beats one collected 120 km away at today's fuel prices.
Invest in your own transport — leasing or owning vehicles gives you scheduling control and removes the margin of third-party hauliers for high-volume lanes.
Optimise load density — invest in shearing, baling, or densifying equipment that reduces volume per tonne. Full truckloads at higher density mean fewer trips for the same revenue.
Consolidation hubs — if you serve rural or dispersed generators, consider secondary collection points where smaller loads aggregate before the main haul.

3. Upgrade Your Processing Capabilities

Processing quality directly determines the price you receive from mills and end-users. Higher specification material commands a premium; contaminated or under-processed material gets discounted or rejected.

Ferrous Processing Investments

Shredders are the workhorse of modern ferrous processing. A shredder producing clean, dense shredder scrap (HMS substitute) consistently achieves prices $20–40/t above unprocessed material at many mills. If you are not shredding, you are leaving money on the table and limiting your customer base.

Magnetic separation upgrades improve ferrous recovery from shredder fluff and mixed demolition scrap. Eddy current separators recover non-ferrous metals from the residue stream, turning waste into revenue.

Shearing lines for heavy structural steel allow you to process material that cannot enter a shredder — beams, columns, heavy plate. This expands the grades you can offer.

Non-Ferrous Upgrading

The spread between low-grade mixed non-ferrous and upgraded, graded material has widened. Investing in separation and sorting capability is high-ROI:

Sensor-based sorting (X-ray transmission, laser-induced breakdown spectroscopy) can separate copper alloys by composition, upgrade aluminium grades, and separate stainless steel from carbon steel in mixed streams.
Cable processing lines for copper recovery from wire and cable — particularly relevant as EV and grid infrastructure decommissioning generates increasing volumes.
Aluminium de-coating — painted or coated aluminium scrap often contains organic contamination. Rotary drum de-coaters or thermal processing upgrades painted scrap to cast/wrought grades with significantly better realisations.

Quality Management Systems

Major steel and aluminium mills are tightening their incoming material specifications. ISO 9001 certification, documented quality procedures, and consistent material certification are increasingly prerequisites for selling to premium customers. This is an area where smaller operators frequently underinvest.

4. Master Pricing and Market Intelligence

You cannot price what you do not understand. Many scrap businesses leave significant margin on the table through poor market intelligence and reactive pricing.

Subscribe to the Right Data Sources

The cost of professional price reporting services is trivial relative to the value of informed purchasing and selling decisions:

Fastmarkets — covers ferrous and non-ferrous globally; HMS indices, copper cathode equivalents, aluminium alloy prices.
AMM (American Metal Market) — essential for US ferrous pricing.
BIR publications — global scrap trade flow data and policy developments.
GMK Center — strong on CIS, Turkish, and EU ferrous markets.
LME and CME — base metal futures for copper, aluminium, zinc, and lead hedging reference.

Build an Internal Price Model

Raw index data tells you what the market is doing. A good internal model tells you what your business should do. Build a simple spreadsheet or system that tracks:

Your average purchase cost by material grade, supplier, and month
Processing cost per tonne by grade (labour, energy, consumables, depreciation)
Transport cost per tonne to each customer
Realised sale price versus index at time of sale
Net margin per tonne by product and customer

This granularity reveals where you are actually making money — which is often not where you think.

Pricing Discipline: Buy Low, Don't Chase

The most common margin-destroying behaviour in scrap is chasing volume by overpaying for material in a rising market, then being caught with high-cost inventory when prices correct. Discipline:

Set your buy prices off a formula (e.g., mill delivered price minus processing and freight, minus target margin), not off what a competitor is rumoured to be paying.
Resist the temptation to chase market share with the buy price during rallies.
Maintain a buffer stock policy — hold enough days of inventory to smooth operational disruptions, but do not build speculative positions unless you have explicit hedging to back them.

5. Navigate Export Controls and Trade Policy

Trade policy has become a central operational consideration for scrap businesses globally. Ignoring it is no longer an option.

The EU Waste Shipment Regulation (2024 Revision)

The revised EU Waste Shipment Regulation, which is now in force, significantly changes the landscape for European operators:

Exports of mixed or non-pre-consumer scrap to non-OECD countries face enhanced scrutiny and facility approval requirements.
EU scrap that was previously exported to Turkey, India, or Southeast Asia must either be processed to meet the new standards or directed to domestic or intra-EU buyers.
This is structurally supportive of European scrap prices but creates compliance obligations for any operator with export activities.

Action: Audit your export volumes by destination country. Engage your legal/compliance team (or an external trade consultant) to assess whether your flows remain permitted and under what conditions. Update your customer contracts to reflect the regulatory risk.

US Tariff Environment

The US has maintained and in some cases extended tariffs on metal imports and exports. The August 2025 tariffs on copper products have added cost and complexity to US non-ferrous trade flows. Monitor the Office of the US Trade Representative for updates.

Building a Compliance Framework

If you operate cross-border or handle regulated waste streams, a documented compliance framework is both a regulatory necessity and a commercial asset:

Maintain records of material origin, composition, and destination for all export shipments.
Ensure receiving facilities in export markets meet the documentary requirements of the origin country.
Train staff on the Waste Shipment Regulation and any domestic hazardous waste rules that apply to your materials.
Consider appointing a dedicated compliance officer or contracting a specialist if your cross-border volume justifies it.

6. Capitalise on the Green Economy Boom

The energy transition is the largest structural driver of non-ferrous scrap demand in a generation. The businesses that position themselves as part of the solution — not just as commodity traders — will access better customers, better pricing, and better financing.

EV Battery Recycling

End-of-life lithium-ion batteries from electric vehicles are beginning to enter the scrap stream in volume. By 2026, early EV fleets from 2015–2019 are reaching end-of-life. Battery packs contain:

Lithium (valuable, complex to recover)
Cobalt (highly valuable where present)
Nickel
Copper (wiring harnesses and busbars)
Aluminium (casing and thermal management)

Most traditional scrap yards do not have the capability to process battery packs safely — they require specialist discharge, disassembly, and handling. But partnering with or referring to licensed battery recyclers creates a new revenue stream and positions you with automotive OEMs and dismantlers who need a compliant battery pathway.

Copper-Rich Infrastructure Scrap

Grid upgrades, EV charging infrastructure, and renewables installations are creating large volumes of copper-bearing scrap — transformer copper, cable, busbars, generator windings. Develop relationships with electrical contractors, utility maintenance firms, and renewable energy installers before your competitors do. These relationships require trust (copper is high-value and theft-prone) — invest in verified supplier onboarding and documented chain of custody.

Selling the Sustainability Story to Customers

Secondary steel uses approximately 74% less energy than primary steelmaking. Recycled aluminium uses roughly 90% less energy than smelting primary aluminium. BIR estimates recycling saves approximately 0.95 Gt of CO₂ per year globally.

Your downstream customers — mills, foundries, fabricators — are increasingly under pressure from their own customers (automotive OEMs, construction developers, consumer goods companies) to document the recycled content and carbon footprint of their materials. Providing documented recycled content certification and an estimated carbon saving per tonne is becoming a commercial differentiator.

7. Digitalise Your Operations

The most consistently profitable scrap operators in 2026 are not necessarily the largest — they are the most operationally efficient. Digital tools are the highest-leverage investment for most mid-size operators.

Yard Management Systems (YMS)

A modern yard management system gives you real-time visibility into:

Incoming material by grade, supplier, and weight
Inventory positions by grade and location in the yard
Processing throughput and equipment utilisation
Outgoing loads by customer, grade, and weight

The operational benefits — reduced shrinkage, fewer mis-grades, faster customer turnaround — typically deliver ROI within 12–18 months for a mid-size yard.

Look at platforms built for the scrap industry: iScrap App (for smaller operations), ScrapRight, or custom ERP integrations for larger businesses.

Weighbridge and Ticketing Automation

Automated weighbridge systems with ANPR (Automatic Number Plate Recognition) reduce staffing costs, eliminate data entry errors, and accelerate turnaround for regular suppliers and customers. Integration with your accounting system eliminates double-entry and the errors that come with it.

Predictive Maintenance for Processing Equipment

Shredders, shears, and balers are capital-intensive assets. Unplanned downtime is expensive — both in lost processing capacity and in emergency repair costs. Vibration and temperature sensors on critical drive components, combined with basic analytics, can identify bearing wear or alignment issues weeks before failure.

Market Pricing Alerts and Automation

Configure alerts on your price reporting subscriptions to notify relevant staff when key indices move beyond threshold levels. In volatile markets, being 24 hours faster to adjust buy or sell prices can be the difference between a good week and a bad one.

8. Strengthen Customer Relationships

Scrap is a commodity, but your customer relationships do not have to be transactional. The operators who invest in genuine partnerships retain customers through market downturns and command premiums in tight supply conditions.

Understand Your Customers' Real Needs

Most scrap customers — mills, foundries, re-rollers — have three core concerns beyond price:

Specification consistency — material that arrives at spec every time, without surprises. Inconsistent quality creates costly downtime and rejection costs for the customer.
Reliability of supply — being able to plan their production around your deliveries. Unpredictable volumes force them to hold excess inventory or scramble for spot tonnes.
Compliance and documentation — complete weight slips, material certificates, origin documentation, and increasingly, carbon footprint data.

Compete on all three dimensions, not just price. You will find most customers will pay a modest premium — or at minimum stay loyal through price competition — for a supplier who reliably delivers on quality, timing, and documentation.

Develop Key Account Management

For your top 5–10 customers (by volume or margin), assign a dedicated point of contact within your business. Regular check-ins — monthly calls, quarterly reviews — create intelligence about their forward needs, their quality feedback, and their strategic direction. A customer who tells you they are planning to upgrade their furnace in 18 months is giving you advance notice to adjust your grades accordingly.

Offer Value-Added Services

Consider what adjacent services you could offer customers that create switching costs and deepen the relationship:

Just-in-time delivery scheduling tied to their production calendar
Bespoke grade blending to meet their specific chemical specifications
Consignment stock arrangements where you maintain a buffer at their facility
Waste stream auditing — helping a manufacturing customer map and optimise their internal scrap generation and segregation, reducing their waste handling cost while improving your incoming material quality

9. Manage Risk in a Volatile Market

Scrap prices can move 15–20% in a quarter. Businesses with poor risk management can go from profitable to loss-making on a single market turn.

Inventory Risk

The primary financial risk for most scrap operators is holding inventory that falls in value before it can be sold. Manage it by:

Setting maximum inventory holding periods by grade (e.g., no more than 30 days of HMS, 14 days of copper)
Pricing and selling incoming material as quickly as possible — do not hold speculatively unless you have a specific view and explicit risk capital allocated
Monitoring your average cost per grade weekly against current market bids

Hedging with Financial Instruments

For non-ferrous metals with liquid futures markets (copper, aluminium, zinc, lead), LME or CME futures provide a genuine hedge against inventory and contractual price risk. If you have a copper inventory position or a forward purchase/sale commitment, an offsetting futures position eliminates market risk from that position.

Hedging is not speculation — it is risk management. But it requires trained personnel and robust internal controls. If you are moving into futures hedging for the first time, start small and work with a specialist broker.

Credit Risk

You are extending credit to customers every time you deliver material and wait for payment. In a stress scenario — a mill financial difficulty, a market dislocation — this can become a significant exposure. Mitigate by:

Running credit checks on new customers before extending terms
Setting and enforcing credit limits by customer
Using trade credit insurance for large or concentrated exposures
Structuring contracts with payment terms that limit your maximum exposure

Regulatory and Compliance Risk

Fines, licence suspensions, or reputational damage from regulatory non-compliance can be existential for a scrap business. Invest in compliance as risk management, not just as a cost.

10. Build Your Brand Around Sustainability

This might sound abstract for a scrap yard, but brand positioning increasingly matters — to customers, to financiers, and to employees.

The ESG Opportunity

Banks, private equity, and infrastructure investors are increasingly applying ESG (Environmental, Social, and Governance) criteria to lending and investment decisions. A scrap business with documented sustainability metrics — tonnes of CO₂ saved, energy intensity per tonne processed, recycled content certification — is a better credit risk in the eyes of an ESG-focused lender and a more attractive acquisition target for a strategic buyer.

Measure and report:

Tonnes of material recycled by type and grade
CO₂ savings versus primary production (use standard industry conversion factors)
Energy consumption per tonne processed
Waste-to-landfill ratio from your operations
Health and safety incident rates

Engage with Policy Stakeholders

The scrap industry is at the centre of the circular economy agenda. Industry bodies — BIR, EuRIC, ISRI, and national federations — provide a channel to engage with policymakers on export regulation, environmental permitting, and carbon accounting. Participation also provides market intelligence and networking.

Attract and Retain Talent

The scrap industry has an image problem with younger workers. Being able to talk authentically about the environmental value of what you do — the CO₂ saved, the circular economy contribution — matters when you are recruiting. Younger employees want to work for businesses with a credible purpose.

11. Key Metrics to Track

A business that does not measure cannot manage. At a minimum, track these KPIs monthly:

Metric	Description	Target Direction
Net margin per tonne (by grade)	Revenue minus all costs per tonne sold	Maximise
Buy-to-sell spread	Average sell price minus average buy price	Maximise
Inventory days outstanding	Average days material sits in yard	Minimise
Processing yield	Output tonnes as % of input tonnes	Maximise
Customer concentration	% of revenue from top 3 customers	Reduce over time
Supplier concentration	% of volume from top 3 suppliers	Reduce over time
Compliance incidents	Number of regulatory notices, fines	Zero
Equipment utilisation	Processing equipment uptime vs available hours	Maximise
Debtor days	Average days to collect from customers	Minimise

Review these in a monthly management meeting with your senior team. Establish benchmarks and hold accountable.

12. Action Plan: Your Next 90 Days

Strategy is only valuable when it is translated into action. Here is a prioritised 90-day plan:

Days 1–30: Audit and Prioritise

Map your current supply chain: which suppliers account for 80% of your volume? How diversified are you?
Calculate your true margin per tonne by grade for the last 12 months. Where are you making money? Where are you not?
Review your top 5 customer relationships: are they on formal contracts? When do they expire? What is your risk of losing them?
Audit your export activities against current EU Waste Shipment Regulation and your domestic regulations.
Identify the one or two processing capability gaps with the highest potential ROI.

Days 31–60: Build Foundations

Initiate conversations with your two or three highest-volume industrial suppliers about long-term contract structures.
Subscribe to one professional price reporting service if you do not already use one.
Start tracking net margin per tonne in a simple spreadsheet — buy price, processing cost, freight, sale price, margin.
Identify the YMS or yard management software options that fit your scale and get demos from two or three providers.
Begin the ISO 9001 gap analysis if you are not yet certified — many premium mill customers are starting to require it.

Days 61–90: Execute and Iterate

Sign at least one long-term supply agreement.
Implement a basic key account management process for your top 5 customers — assign contacts, schedule first quarterly review call.
Make a capital investment decision on your highest-priority processing upgrade.
Establish a compliance register and assign ownership of regulatory monitoring.
Set your first sustainability metric targets and decide how you will report them.

Conclusion

The scrap industry in 2026 is not in crisis — it is in transition. The businesses that will grow are those that move from reactive commodity trading to strategic, operationally excellent, sustainability-oriented enterprises.

The fundamentals are genuinely favourable: global scrap demand is structurally rising, secondary production is a regulatory and commercial imperative, and the green economy is creating new non-ferrous demand that will only grow. But favourable fundamentals do not guarantee individual business success. They create the opportunity. Execution — disciplined supply chain management, investment in processing quality, market intelligence, customer relationships, and risk management — is what converts that opportunity into profit.

The playbook above is not a 12-month project. It is a multi-year transformation. Start with the 90-day plan, build the foundations, and revisit the strategy each quarter as markets evolve.

The scrap operators who get this right in 2026 will be the ones setting the standard in 2030.

How is your operation adapting to these trends? Share your experience and questions in the comments below.

#ScrapMetal #Recycling #Metals #Commodities #Sustainability #CircularEconomy #Steel #Copper #Aluminium #Manufacturing #ScrapBusiness #EAF #GreenSteel

Sources: BIR World Mirror, GMK Center, Fastmarkets, American Metal Market, EU Waste Shipment Regulation (2024), LME, ISRI.