The fragile two-week ceasefire in the Iran–US–Israel war has spurred some positivity in business sentiment. Yet, the unresolved question of the Strait of Hormuz—still effectively held hostage by Iran—continues to cast a shadow. Against this backdrop, a webinar jointly organized by Waste & Recycling and BigMint examined where ferrous scrap and steel markets are headed. 

Logistics, not supply, is the real constraint 

In Middle East, the situation remains deeply constrained by logistics. “The key constraint today is not scrap availability, but the ability to move it. Freight has become the deciding factor in trade flows. At $1,500–2,000 per shipment, it is simply not viable to move cargo valued at $300–380 per tonne, forcing suppliers to either hold material or sell at a loss to maintain liquidity," says Jawed Ahmed, Founder & CEO, Al Qaryan International DMCC.

 He adds that the UAE generates nearly 2 million tonnes of scrap annually, with mills absorbing less than 50% of the material. Surplus volumes typically moved to Bangladesh, Pakistan, and occasionally India—though India has largely remained out due to tariffs and policy factors. “Scrap, being highly freight-sensitive, is now unviable to ship under current conditions,” he says. As a result, suppliers are either holding cargo or selling below $300 per tonne, often at a loss. 

 At the same time, regional imbalances are intensifying. Saudi Arabia is facing a scrap shortage due to disruptions in imports of primary feedstock such as iron ore and DRI. With over 10 million tonnes of such imports impacted, mills are increasingly reliant on scrap, and some warn production could halt within 30 days if supplies do not arrive. Meanwhile, export restrictions in countries like Qatar and Kuwait are further tightening trade flows, informs Ahmed. 

 Shipping disruptions reshape trade flows 

 Shipping dynamics are amplifying these disruptions. Surabhi Pandey Shukla, Regional VP–NE USA, Sealink International, notes that “Current disruptions are reshaping shipment strategies, with cost efficiency now outweighing speed.” Traders are waiting where possible while exploring alternative routes—particularly toward Latin America, Europe, and Mexico—as scrap flows must continue despite constraints. 

Freight costs have surged due to war risk and emergency surcharges, and even with a ceasefire, volatility is expected to persist. Strait of Hormuz tensions have also pushed up fuel costs, raising logisticsexpenses across ocean, rail, and road transport. Operationally, congestion, vessel rotation issues, blank sailings, and equipment shortages—already visible in regions like Detroit and Atlanta—are slowingthe system. The impact is systemic: beyond higher freight rates, bottlenecks and choke points are fragmenting global trade into a slower, less predictable network, she adds. 

 Cost pressures squeeze steelmakers 

For steelmakers, these disruptions are feeding directly into cost pressures. Rohit Agrawal, Project Head, JSW Steel Ltd, says global shocks have a direct impact on India due to its high import dependence across raw materials—from iron ore and coking coal to ferrous scrap and critical metals. “Thermal coal has risen over 20% in the past one to one-and-a-half months, pushing sponge iron up by more than 10%. Scrap prices in Turkey and imported scrap into India have also increased by over 10%,” he notes. 

However, finished steel prices—despite being at a three-year high—have not kept pace with rising input costs, creating significant margin pressure. Demand growth remains slower, making procurement increasingly challenging. Agrawal adds that with over 60% of India’s scrap being obsolete and reliant on LPG-based cutting, a nearly fourfold rise in LPG prices has sharply increased processing costs. 

 Structural gaps persist in global steel flows 

Ahmed points out that the GCC has sufficient capacity in long products, the real gap lies in flat products—plates and hot-rolled coils—which must be imported and are exposed to the same logistical bottlenecks. With demand at 38–40 million tonnes and domestic production at 20–22 million tonnes, this gap leaves limited scope for immediate sourcing shifts. Even stockpiling is constrained by the same logistics challenges, prompting buyers to move toward shorter contracts and smaller volumes. 

 Over the longer term, this could drive backward integration, improved inventory planning, and the creation of buffer stocks. Markets like the UAE and Saudi Arabia may increasingly secure emergency feedstock to manage disruptions, he adds. 

 Energy and policy pressures push prices higher 

On the pricing side, Hemant Dewangan, AGM: Steel-Operations, BigMint, notes that HRC prices at a three-year high reflect both cost pressures and strong demand, particularly in India’s last fiscal quarter. While scrap is not directly linked to HRC, supply tightening and policy measures such as safeguard duties have driven prices up by around 17%.

For coated and galvanized steel, the increase is sharper due to energy-intensive processing. Gas prices have risen 50–60%, while supply remains constrained at 60–70% of normal levels, intensifying input cost pressures—especially for standalone mills reliant on external gas. These pressures are being passed down the value chain, raising steel prices for buyers.  

 A volatile shipping outlook 

Shipping markets remain volatile. Longer voyages, higher fuel consumption, and operational inefficiencies have pushed rates upward, with disruptions at ports such as Salalah further affecting vessel rotation and increasing congestion. Post-Chinese New Year demand recovery, combined with vessel shortages, has kept markets uneven. In the near term, stability may take at least a quarter, assuming geopolitical and operational conditions improve, says Shukla. 

 Shipping lines are adapting through shorter, flexible contracts, hybrid agreements, and contingency routing. Cargo diversions and risk monitoring are becoming standard practice, with essential goods prioritized over commodities like scrap. “The focus has shifted from speed to reliability. Longer transit times are acceptable if movement is secure. Flexibility in pricing, routing, and timelines has become the defining principle,” she adds. 

 Procurement shifts towards risk and resilience 

Procurement strategies are also evolving. “At large production scales, even small changes in scrap usage translate into significant volumes, requiring proactive sourcing. The focus is increasingly on informed risk, particularly around quality, with investments being made to handle more diverse scrap inputs,” says Agrawal. 

 However, large inventory build-ups remain unviable due to thin margins and price volatility. Scrap can still be significantly more expensive than hot metal. Instead, steelmakers are prioritizing stronger supply relationships, long-term contracts, and reliable sourcing pipelines. 

 Volatility becomes structural 

Looking ahead, disruptions are expected to persist. “Volatility is becoming structural,” Agrawal notes, driven by recurring shocks—from geopolitical conflicts to logistics crises. This is likely to push localization, with production moving closer to customers and becoming more specialized. Sustainability will also become central, with scrap emerging as the most scalable decarbonization pathway, supported by circularity mechanisms such as EPR and deeper value chain collaboration.