The EU must secure an additional 8 million–11 million metric tons (mt) of steel scrap by the end of the decade to meet a 12%–13% jump in domestic crude steel output by 2027 and feed a wave of new electric arc furnaces (EAFs) coming online across Italy, Austria and France, according to Stanislav Zinchenko, CEO of Kyiv-based think tank GMK Center.

Zinchenko told Platts, part of S&P Global Energy, that steel safeguards and the Carbon Border Adjustment Mechanism (CBAM) have begun redirecting tonnage that the EU once imported — 7 million mt/year of long rolled steel, with roughly half historically produced via the blast furnace-basic oxygen furnace route — toward domestic EAF output.

How much scrap will the new EAFs consume?

The replacement of declining imports alone calls for an extra 4 million–6 million mt of scrap by 2027, measured against 2025 baseline output. By 2028, the commissioning of further EAF capacity will lift domestic scrap demand by another 4 million–5 million mt annually, Zinchenko said.

Major greenfield and conversion projects already announced include Metinvest's 2.7 million mt plant in Piombino, Italy; Voestalpine's combined 2.5 million mt in Linz and Donawitz, Austria; Marcegaglia's 2.1 million mt unit in Fos-sur-Mer, France; ArcelorMittal's 2 million mt EAF in Dunkirk, France; and NLMK's expansions in Verona (+0.5 million mt) and Belgium. Together, these sites will generate up to 5 million mt of fresh annual scrap demand once fully operational.

Why are steelmakers choosing scrap over DRI?

Most of the new furnaces will run on scrap during their initial years, until cheap direct reduced iron (DRI) or hot briquetted iron (HBI) reaches the EU market, Zinchenko noted.

"We are seeing a clear, pragmatic trend in which steelmakers are prioritizing scrap-based EAF capacity additions over capital-intensive DRI-hydrogen concepts," he said.

Zinchenko's forecast assumes a blended feedstock mix and less-than-maximum utilization, since the new EAFs' run rates remain unknown. The scrap-to-DRI ratio will swing with quarterly moves in metallic feedstock prices.

Can EU scrap supply keep up?

Higher domestic demand should support European scrap prices and lift collection volumes, the GMK Center CEO said. Yet from today's vantage point, meeting expanded requirements with local supply stays difficult: the EU continues to net-export scrap, shipping 11.5 million mt to third countries in 2025.

The export bleed is now in regulators' crosshairs.

What is Brussels proposing?

The European Commission wants to cut annual EU scrap metal exports by 4 million–4.1 million mt — roughly 25%–26% — from 2025 levels. On Sept. 18, the Commission tabled a draft delegated act under the revised Waste Shipment Regulation that would cut off most non-OECD countries from EU scrap supplies, with the measure set to take effect May 21, 2027.

If enforced, the curbs would channel an extra 4 million mt+ annually back into the EU market, partially closing the projected 8 million–11 million mt gap and tightening global supply for buyers in Türkiye, South Asia and Southeast Asia, traditional destinations for EU ferrous scrap.

What it means for shippers and carriers

Containerized scrap flows out of Europe — primarily via ARA (Amsterdam-Rotterdam-Antwerp) range ports, Bilbao, Hamburg and the Italian Adriatic — would face immediate redirection. Bulk carriers now running scrap parcels to non-OECD buyers would need to reposition tonnage or pivot to alternative cargoes.

For steel mills commissioning new EAFs, the corollary is feedstock logistics: locking in scrap supply, securing inland barge and rail links from collection hubs, and building DRI import capacity as backup. With the regulation advancing toward its 2027 effective date, Brussels has effectively synchronized its trade and industrial policy levers. Whether EU scrap prices climb enough to stimulate fresh collection — or importers lean harder on DRI/HBI shipments from the Middle East, Russia and Brazil — will set the pace of the next scrap-shipping cycle.