Free trade of scrap is important to ensure sustainable scrap supply to meet growing demand from steelmaking, while Turkey’s main weapon against any scrap availability issues is to import semi-finished steel instead. This was the conclusion of panellists at Kallanish Steel Scrap 2025 in Istanbul on Thursday.

Although some European decarbonisation investments have been postponed, meanwhile, electric arc furnace investments will continue – over the longer term, the energy transition will take place.

China will undoubtedly close steelmaking capacity in the coming years, but it may not do this at the speed the market dictates.

In response to discussion about potential restrictions on scrap exports impacting Turkish procurement, Turkish Steel Producers Association (TCUD) general secretary Veysel Yayan noted that such measures will initially cause prices in the exporter’s local market to drop. However, eventually scrap collection activity and investment will also fall, resulting in diminished supply. Competition should be unimpeded to allow scrap merchants to make profits. “If we are sincere on having free trade conditions, problems will be solved in the market,” Yayan said.

Scrap supply limitations could be mitigated by increased ore-based metallics use, added Tayfun İşeri, chairman of Turkey’s Flat Steel Product Exporters, Importers and Manufacturers Association (YİSAD). “In the old days, EAFs could not use more than 10% metallics. Now it’s 40%. The engineers of this world will find new technologies, new substitutes. Secondly, if the price is not right, Turkey will start importing semis. People will find a way to survive.”

Increased semis imports by Turkey in 2024, to mitigate scrap price increases, was a key theme throughout the conference.

Worldsteel director, industry analysis Baris Çiftçi meanwhile stressed that although the EU has postponed numerous low-emission steel projects, most were hydrogen based. “Decarbonisation goes through a whole portfolio of initiatives and hydrogen is only one,” he pointed out. EAFs and biomass are alternative routes whose progress is not slowing down, he added.

Tariffs, hydrogen prices and profitability are temporary restrictive factors while decarbonisation is a long-term journey that will remain intact, Çiftçi noted.

Pressure for a drastic steelmaking capacity cut in China, as was the case with induction furnaces in 2016, does not exist today. Nevertheless, “between now and 2040, Chinese capacity will decline – it’s just a question of how well this [tempo of decline] matches the market,” said Kallanish Asia Editor Tomas Gutierrez.

Carbon trading will soon come into play in China, which will impact steelmaking costs. “But I would be very cautious of the five-year plan because China has never hit its five-year targets for the steel industry,” he added. There are EAF investments occurring but investors are hesitating. “I would put more emphasis on what support there will be for real estate in the short term,” he concluded.