Key market trends and regulations affecting recycled steel in 2026 and beyond

At BIR's Stainless Steel & Special Alloys Committee in Gothenburg, Sweden, Chairman Joost van Kleef described the sector as "constantly adapting and always looking ahead." The need to adapt and keep an eye on the future was the thread that ran through the session's discussions, which included the changing global flows of material and the new EU Carbon Border Adjustment Mechanism (CBAM).

An overview of current global trading conditions 

Ritesh Maheshwari, executive director of India-based Shabro Metallic Pvt Ltd., shared current global trading conditions with a summary of the BIR World Mirror update for the first quarter of 2026.

Highlights included the LME nickel price peaking around US$ 19,500 per tonne, nickel production in Indonesia reaching around 210 million tonnes, and U.S. mills reporting 80 percent utilization rates. In addition, Red Sea disruptions led to longer delivery times from Asia to the Middle East, while higher freight and insurance costs also affected shipments.

Financial performance in Europe was below satisfactory levels but showing signs of improvement, while the start of CBAM led to higher prices across a wide range of products in the value chain, according to Maheshwari. Asia experienced increased production costs owing to the Middle East supply chain disruption. And in the USA, there was firm domestic demand, but stainless scrap exports fell to multi-decade lows in 2025.

A changing landscape means that recyclers must adapt 

An overview of how and why the global stainless landscape has changed was provided by Anand Gupta, founder and CEO of Aamor Inox Ltd. in India. "China continues to dominate on scale," he said. "Indonesia has grown rapidly through nickel-led expansion, and India is emerging as one of the fastest-growing stainless ecosystems globally, reflecting a staggering 54 percent growth. At the same time, Europe and the Americas are facing higher pressure around energy, carbon, and overall competitiveness."

While Asia is often discussed as one story, Gupta pointed out that China, Indonesia, and India have evolved across very different models. "China's growth has largely been driven by scale and integration," he explained. "Indonesia's growth has been driven by nickel advantage and NPI (nickel pig iron) economics. India's model, however, is much more demand-driven and significantly more scrap-dependent." Because of these differences, their raw material strategies are very different — and this matters as secondary material becomes increasingly strategic, it was noted.

Select markets are focused on decarbonizing scrap trade and recycling 

For the mature scrap economies like Europe and the U.S., there has been greater emphasis on retaining cleaner scrap for domestic consumption, with circularity expectations, carbon policies, and traceability requirements starting to reshape trade flows. "Scrap remains a liquid commodity, but the market is becoming more selective," said Gupta. Quality requirements, domestic consumption priorities, logistics, and policy considerations are becoming increasingly important.

In India, domestic scrap generation has not been growing at the same pace as demand, and there are challenges around consistency, quality, and metallic yields, meaning a continued dependence on imported scrap, it was suggested.

Higher scrap usage sounds attractive in theory, but Gupta explained that the operational reality is more complex. While some scrap melt routes can absorb a wider range of qualities, others require tighter controls over chemistries and residuals. He believed that competitiveness in the future will increasingly be determined by the ability to use and process scrap effectively, not just to secure it. His prediction was therefore that the sector's next phase of adaptation will happen in the melt shops.

The EU Carbon Border Adjustment Mechanism

Turning the focus to Europe, Secretary General of Recycling Europe Julia Ettinger gave an update on CBAM and told the audience to "keep a close eye" on its developments. CBAM puts a price on specified carbon-intensive imports into the EU, such as steel and aluminium. It came into full effect, known as its definitive phase, on January 1 this year.

The EU is already looking at proposals to expand the scope of CBAM. Ettinger explained that there is a drive to move burdens downstream, such as including semi-finished products. This discussion led to the question of whether recycled materials would be included in CBAM in the future. Currently, the European Commission has said inclusion of post-consumer scrap could undermine recycling incentives and circular economy objectives.

"Currently, scrap is not planned to be included in CBAM, but — and this is very important — recycled content and circularity increasingly enter the discussion about carbon pricing, so while it's not in the scope right now, it may happen at some point in the future," Ettinger said.

She explained that the EU Emissions Trading Scheme (ETS) and CBAM are linked. The ETS places a limit on the total amount of greenhouse gas emissions that can be emitted by operations within its scope. Companies can purchase so-called "allowances" to emit CO2, and those allowances can be traded with other companies. The concept is that companies reduce their emissions because they can trade their unused allowances, giving them a financial incentive to decarbonize. Free allowances have been available under the EU ETS to prevent companies from relocating outside the EU to avoid the costs, but these are being phased out by 2034 owing to the introduction of CBAM.

Final comments 

The meeting concluded with a panel discussion on various topics, bringing in BIR Trade and Environment Policy Officer Alexandra Vartan and Adam Schaffer, vice president of International Trade and Global Affairs at the U.S.-based Recycled Materials Association (ReMA). 

Van Kleef, who is managing director of Netherlands-based Oryx Stainless, asked Schaffer what influenced investment decisions. He responded that many decisions in the U.S. were made when the Infrastructure Investment Act and the Inflation Reduction Act were being put in place by Congress, with businesses wanting to "make sure that they are not going to get overturned by trade policies".

Revisiting CBAM and its complexities, Vartan flagged up that a BIR Business Digest is being prepared on this EU initiative and will be published in the coming months. BIR is also planning a webinar on the topic with Recycling Europe.