Italian ferrous scrap market saw a sharp trend reversal in late June, with scrap prices falling by €20 to €30 per metric ton (mt) due to worsening international markets and low downstream steel demand. The negative sentiment was mirrored globally, with Turkish scrap decreasing by $25-$30/mt and Spanish prices declining by €20/mt, pushing steelmakers to reduce purchasing and unloading activities. This steep price decline and high inventory accumulation signal a bearish outlook for European raw materials into July, as scheduled production stoppages and summer shutdowns in countries like Germany will further depress regional demand and overall scrap consumption volumes.

[SMM Cast Aluminum Alloy Morning Comment: Bears Add Positions, Aluminum Alloy Night Session Plunges, UAE Aluminum Scrap Export Ban Takes Effect] Overnight, aluminum alloy futures weakened sharply. The night session opened at 22,850 yuan/mt, closed at 22,720 yuan/mt, down 390 yuan/mt, or 1.69%.

The benchmark price for premium heavy melting scrap (HMS 1&2 80:20) exported from the United States east coast to the primary Turkish import hub suffered a steep correction, dropping by $14 per metric ton week-on-week to settle at $388 per ton CFR. Trading desks confirmed that the rapid price deterioration reflects a complete freeze in forward replacement bookings by Turkish electric arc furnace (EAF) mills. Facing heavily compressed domestic and export rebar rolling margins, Mediterranean producers are actively lowering structural melting utilization rates and rejecting high-priced international raw metal inputs.

As resource security and decarbonization become increasingly important, major economies are strengthening efforts to retain aluminum scrap. From the EU's review of export controls and the U.S. strategic asset proposal to Japan's circular economy initiatives and policies in the UAE and South Africa, these developments could reshape global scrap flows and affect secondary aluminum markets.

[SMM Steel] Japan exported 2.35 million mt of ferrous scrap in January-April 2026, down 9.9% year on year, while April exports fell 10.1% YoY to 667,678 mt. Vietnam remained the largest importer of Japanese scrap during the period, importing 1.02 million mt, down 10.1% YoY. Bangladesh imported 516,219 mt, up 22.3%, while South Korea imported 350,019 mt, down 17.9% YoY. Meanwhile, Japanese scrap exports to Thailand more than doubled to 173,869 mt during the four-month period.

Japan's Kobe Steel has announced plans to evaluate the installation of a new, large-scale scrap melting furnace at its flagship Kakogawa Works, aimed at accelerating its low-carbon transition. This project serves as a key initiative to meet its corporate climate target of reducing carbon emissions by 38% by 2030 (compared to 2013 levels). By combining this high-capacity scrap melting technology with existing blast furnace infrastructures, the mill expects to significantly increase its utilization rate of high-grade ferrous scrap, thereby reducing dependency on virgin hot metal and pig iron inputs.