UK steelmakers and recyclers call for urgent action to keep scrap value at home

A coalition of the UK’s leading steel producers and metal recyclers is urging governments across the UK to reform policy frameworks to unlock the economic and environmental potential of domestic steel scrap. The call follows the publication of a new report by the Circular Steel Sub-Committee, in cooperation with industry body UK Steel, titled Circular Steel: Strengthening the UK’s Industrial Supply Chain.

The report highlights a structural imbalance in the UK market: it is currently cheaper to export steel scrap and re-import finished steel products than to process scrap and manufacture steel domestically. The UK generates around 10 million tonnes of steel scrap each year, but more than 80 percent is exported. Much of this material later returns to the country in the form of finished goods, undermining domestic processors and manufacturers while exporting jobs, value creation and emissions.

According to the authors, the historic lack of large-scale, scrap-intensive electric arc furnace (EAF) steelmaking in the UK has prevented the development of a strong domestic market for high-quality scrap. That situation is now changing as the UK steel sector transitions towards EAF technology. Industry leaders warn, however, that without rapid policy reform the country risks repeating past mistakes by outsourcing the benefits of circular steel production to international competitors.

The analysis identifies several barriers holding back the domestic scrap value chain, including insufficient processing capacity, high industrial energy costs, inconsistent scrap quality, and uneven regulatory enforcement across the recycling sector. To address these challenges, the Circular Steel Sub-Committee is calling for closer coordination between government, regulators and industry, with aligned fiscal, environmental and energy policies.

Central to the proposals is an industry-led Code of Standards to improve quality assurance and traceability of steel scrap, laying the groundwork for future national standards. The report also calls for targeted government support, including investment incentives for domestic scrap processing infrastructure, fairer market conditions between exports and domestic use, national definitions for EAF-grade scrap, modernised regulatory oversight and the inclusion of recyclers in energy cost support schemes such as the British Industrial Competitiveness Scheme.

Jacob Hayler, Chair of the Circular Steel Sub-Committee, said: “The UK’s steel scrap resource is one of our greatest industrial assets, but the policy framework that drives the market has not kept pace with the shift to low-CO₂ production. It costs less to export steel scrap for processing and manufacture abroad then re-import those steel products, than it does to process and manufacture it domestically. That must change if we are to retain jobs, encourage investment, and support resilience in the UK’s manufacturing base.” He added: “The UK has the scrap, the skills, and the ambition to be a global leader in circular steel… What we need now is coordinated policy leadership to align with national climate, industrial and competitiveness objectives.”

Tony Hayer, Managing Director of S. Norton Group, underlined the role of recyclers, stating: “Recycling is the backbone of EAF steelmaking, but the system must evolve to meet the needs of a modern, low-carbon economy.”

From the steelmaking side, Rajesh Nair, CEO of Tata Steel UK and Chair of UK Steel, described the transition to EAF production as “a once-in-a-generation opportunity to revitalise UK steelmaking,” stressing the need for “a competitive domestic steel scrap supply chain that supports investment, strengthens our manufacturing base, and keeps more economic value in the UK.”

Carles Rovira, CEO of 7 Steel UK, echoed this view, noting that EAF technology has been central to his company’s operations for decades. He said that a resilient domestic scrap supply chain, backed by government policy and a circular materials approach, is essential “to unlock investment, strengthen UK manufacturing, and ensure the economic value of steel stays rooted in our communities.”

Source: UK Steel, Photo: Fotolia