The Shredded Scrap Price Trend in 2025 has clearly reflected the realities of a slow and cautious steel market across major regions. Shredded scrap, which is mainly produced by shredding end-of-life vehicles, appliances, and mixed light steel scrap, is widely used by steel mills because of its uniform size and relatively consistent quality. Because it sits between prime scrap and heavy melting scrap in terms of cost and usability, shredded scrap prices often move in response to both manufacturing and construction activity. In Q3 2025, the trend has mostly been negative, driven by weak demand, excess supply, and overall economic uncertainty.

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Understanding Shredded Scrap in Everyday Terms

Shredded scrap is processed scrap metal that comes from everyday products like old cars, white goods, and light industrial scrap. After shredding, impurities are removed, making the material easier to melt in steel furnaces. Steel mills prefer shredded scrap when they want predictable melting performance without paying the higher cost of prime scrap.

Because shredded scrap depends heavily on recycling activity and steel mill demand, its pricing reacts quickly to changes in the market. When steel demand slows, mills cut purchases. When scrap supply remains high at the same time, prices naturally come under pressure.

Global Market Situation in Q3 2025

In the third quarter of 2025, shredded scrap prices declined across most global markets. The main reason was weak steel demand from construction and manufacturing sectors. Many steel mills reduced production or operated at lower utilization rates, which lowered their need for raw materials.

At the same time, scrap supply stayed strong. Recycling activity did not slow significantly, and inventories built up across yards and processing facilities. Sellers were forced to offer discounts to move material, especially when buyers were in no rush to purchase.

Another important factor was competition from alternative raw materials such as Direct Reduced Iron (DRI) and Hot Briquetted Iron (HBI). In some regions, these alternatives became more attractive due to stable pricing and availability, further reducing shredded scrap demand.

United States Market: Domestic Weakness Showing Clearly

In the United States, shredded scrap prices showed a clear downward movement during Q3 2025. Steel mills reduced scrap intake as finished steel demand softened, particularly in construction-related products. Higher interest rates and slower infrastructure spending affected steel consumption, leading mills to adopt a cautious buying approach.

Energy costs and operating expenses also played a role. Mills focused on controlling costs and avoided building excess inventory. Export opportunities were limited, meaning more shredded scrap stayed within the domestic market, increasing supply pressure.

Overall, the U.S. shredded scrap market experienced a modest but steady decline. The situation did not involve sudden price crashes, but the direction remained clearly downward, with uncertainty carrying into the next quarter.

Germany: High Costs and Lower Industrial Activity

Germany, one of Europe’s key steel-producing countries, saw shredded scrap prices fall during Q3 2025. Weaker demand from steel mills was the primary driver, influenced by high energy costs and a seasonal slowdown in industrial activity.

Manufacturing output in sectors such as machinery and automotive remained under pressure, reducing steel consumption. As a result, mills lowered production and adjusted raw material purchasing accordingly. Export competition increased, adding further pressure on domestic prices.

By September 2025, prices declined further as demand from the manufacturing sector weakened and scrap supply increased. Global economic uncertainty also influenced buying behavior, with mills preferring short-term purchases rather than long-term commitments.

Italy: Seasonal Slowdown and Softer Demand

In Italy, shredded scrap prices declined more noticeably in Q3 2025. The market was affected by seasonal slowdowns during the summer months, when many factories and construction projects reduce activity. Lower steel production directly impacted scrap demand.

Although the overall decline was moderate, it marked a shift in sentiment. Mills became more focused on cost control and less aggressive in raw material buying. Domestic availability of shredded scrap improved, reducing urgency among buyers.

In September, prices moved lower again as construction activity slowed with seasonal changes. Improved scrap collection also added to supply, reinforcing downward pressure on prices.

Spain: Cautious Buying and Improved Scrap Availability

Spain’s shredded scrap market also experienced a decline in Q3 2025. Steel demand softened as construction activity slowed and manufacturing output weakened. At the same time, scrap availability improved due to higher collection rates.

Prices had remained relatively stable earlier in the year, but the third quarter showed a shift toward more cautious purchasing. Mills bought only what they needed, avoiding large stockpiles. Import competition remained stable, keeping additional pressure on domestic prices.

By September 2025, shredded scrap prices declined again, reflecting lower demand from steel manufacturers and increased scrap supply. Market participants closely monitored demand signals, aware that any recovery would depend on broader economic improvement.

Role of Construction and Manufacturing

Construction and manufacturing are the backbone of shredded scrap demand. In 2025, both sectors faced challenges. High financing costs delayed projects, and uncertain economic conditions reduced new investments. Manufacturing output in several regions slowed, especially in energy-intensive industries.

When construction activity drops, demand for long steel products falls. When manufacturing slows, flat steel demand weakens. In both cases, steel mills reduce production, and scrap purchases decline. This chain reaction was clearly visible in Q3 2025.

Supply Side: Why Scrap Stayed Abundant

Despite weaker demand, shredded scrap supply remained strong. Recycling activity continued steadily, supported by end-of-life vehicle processing and appliance recycling. Shredders maintained output levels, leading to rising inventories when demand softened.

This oversupply situation gave buyers greater bargaining power. Mills could delay purchases and negotiate lower prices, knowing material was readily available.

Market Outlook Going Forward

Looking ahead, the outlook for shredded scrap prices remains cautious. Without a clear recovery in steel demand, prices are likely to stay under pressure. Seasonal factors may offer short-term support, but a strong upward movement would require improved construction activity and stronger manufacturing output.

Global economic stability, energy costs, and trade flows will continue to influence the market. Any disruption in scrap supply or sudden increase in steel demand could change the trend, but for now, market participants remain careful.

Conclusion

The Shredded Scrap Price Trend in 2025 highlights the close connection between scrap prices and the broader steel economy. Across the United States and major European markets such as Germany, Italy, and Spain, prices declined due to weak steel demand, excess scrap supply, and cautious buying behavior. Competition from alternative raw materials and ongoing economic uncertainty further shaped market sentiment.

As the industry moves forward, both buyers and sellers are focused on managing risk rather than pursuing aggressive growth. Until construction and manufacturing show clear signs of recovery, shredded scrap prices are expected to remain soft, reflecting the practical realities of supply and demand in today’s steel market.

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