Share of scrap in global crude steel production set to rise to around 35% by 2030 – BigMint analysis

• • Share of scrap in global crude steel production rose to 33% in H1CY’26

• • Decline in China production impacts pig iron ratio, set to decline further

• • DRI share in H1 impacted by Iran crisis, set to recover on investment push

Morning Brief: The usage of scrap in global steel production is growing at an unmistakable pace and, although over the last few years growth has been static, the long term trend is quite evident. BigMint data show that the share of scrap in global crude steel production peaked in January-June 2026 (H1CY’26), a level not achieved in recent years, and this points to the growing importance of scrap in sustaining higher steel production in the coming years amid increased pace of decarbonisation globally and carbon trade regulations.

Global crude steel production fell by 0.7% y-o-y in January-June to 931.5 million tonnes (mnt), as per latest data from the World Steel Association (WSA). Production during the period was majorly affected due to the prolonged real estate crisis in China and the US-Iran war which had a severe impact on steel production in the Middle East. Geopolitical conflicts drove freight and fuel costs higher which affected steel production and demand.

Global crude steel metallic mix:

Growing importance of scrap: The share of scrap in global crude steel production rose to 33% in H1CY’26, the highest since 2023 and 1% higher than the year-ago period. While the share has been static at 31-33% over the last four years, there is a gradual upward trend. Consumption increased to 324 mnt in H1 and looks set to be significantly higher in 2026 than last year’s 598 mnt.

Steelmakers around the world are adapting to sustainable production processes but the availability of scrap is constrained. This is due to the level of economic development of some of the leading steel producing countries such as India and China and inadequate availability with regard to volume and growth of steel production in these countries. Of late, growing trade restrictions limiting the export of scrap have further constrained availability. This explains why the share of scrap in steelmaking is limited by larger global economic and geopolitical factors.

Another reason why the share of scrap increased in H1CY’26 is higher crude steel production by predominantly scrap-based countries such as the US and Turkiye. Data show that while US production increased by 3.5% y-o-y during the period, Turkiye’s output rose by over 14%. The share of scarp-based EAFs in both these countries is around 70-75%. Therefore, scrap usage directly increased.

BF-BOF production still dominates globally but scrap usage in the BOF has increased significantly over the years amid sustainability targets of the major global BF-based producers.

China has set a 15% target for scrap share by 2030, although current share is still around 10% due to lower availability, higher electricity and other cost issues vis-a-vis primary production. In India, major producers are investing in EAFs; however, the pace of growth is much slower than approved investments in BFs and induction furnaces.

In Europe much of upcoming EAF investments are paired with low-carbon DRI while scrap-based investments are happening in Britain and elsewhere in the EU. Moreover, with import tariffs and domestic production growth in the US, scrap consumption outlook is strong. Turkiye and Southeast Asia, already major consumers of scrap, will increase their share manifold on expanding crude steel production.

Pig iron share to decline: The share of pig iron in the global steel metallic mix is expected to decline further as steel production in China is expected to edge down markedly till 2030. However, some of it will be counterbalanced by higher BF-based steelmaking growth in India and Southeast Asia.

The share of pig iron decreased over the years, although the static share is attributed to gradual decline. In H1CY’26, the 3% drop in China’s crude steel output impacted the share of pig iron. Higher coal and coke market volatility has also affected pig iron.

DRI share impacted by Middle East crisis, set to rise: The share of direct reduced iron in global steelmaking fell to 6% in H1 from 7% in 2025. Total consumption was assessed at 73 mnt during the review period, 1 mnt lower than the year-ago period. This was majorly due to the Iran crisis, which is a major producer of DRI, and its impact on production in the wider Middle East.

In India, the production and use of DRI increased in H1 on higher crude steel production and the large presence of induction furnace-based producers who favour DRI over scrap due to easier availability and cost factor, although higher use of DRI affects sustainability performance and product chemistry.

The share of DRI is set to rise on a strong pipeline of investments in Europe due to sustainability concerns and carbon costs and in the Middle East and North Africa due to easy availability of raw materials and low-carbon fuel. Major steelmakers in South Korea, Japan, China and India are investing in DRI-based iron production.

Outlook:

As per BigMint projection, global scrap share in crude steel is set to increase to 34-35% by 2030, with total consumption set to exceed 700 mnt on growing circularity efforts and higher generation as well as the requirement of reducing carbon emissions from production.

In 2026, scrap’s share is expected to remain at the current level of 33% of global production, with total consumption likely to reach around 640-650 mnt.