The European Union (EU) needs to increase crude steel production by 12 to 13 percent by 2027 to compensate for the decline in steel imports due to protective measures and the carbon border adjustment mechanism. According to Stanislav Zinchenko, CEO of the Kyiv-based think tank GMK, this goal requires securing 8 to 11 million tons of steel scrap.
Current state of steel production in the European Union
Previously, the European Union imported 7 million tons of long-rolled steel annually, half of which was supplied through blast furnace and basic oxygen furnace methods. Due to protective measures and the carbon border adjustment mechanism, this volume is expected to be replaced by steel production within Europe, which is heavily reliant on scrap.
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New steel production projects and scrap needs
To replace the anticipated decline in steel imports, the European Union needs a 12 to 13 percent increase in crude steel production by 2027, which requires an additional 4 to 6 million tons of steel scrap. Additionally, with the commissioning of new furnaces in 2028, domestic demand for scrap could increase by another 4 to 5 million tons.
Announced electric arc furnace (EAF) projects include a green plant with a capacity of 2.7 million tons in Piombino, Italy, two 2.5 million ton projects in Linz and Donawitz, Austria, a 2.1 million ton unit in Fos-sur-Mer, France, and a 2 million ton furnace in Dunkirk, France. These projects will largely depend on scrap supply.
Zinchenko also predicts that the increase in demand will keep European domestic prices for scrap high. However, meeting the increasing needs with domestic supply remains a significant challenge, as the EU is losing a double-digit flow of scrap through exports and will export 11.5 million tons to third countries alone in 2025.
By 2027, the situation may change. The European Commission aims to reduce annual exports of EU steel scrap by 4 to 4.1 million tons, or 25 to 26 percent from 2025 levels. This reduction includes a major cut in metal scrap supply to non-OECD countries starting from May 21, 2027.
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