Export restrictions on steel scrap could devastate the UK metals recycling industry, with analysis by Sheffield Hallam University showing that even modest quotas could cost billions in lost gross value added and thousands of jobs over five years.
The research, commissioned by the British Metals Recycling Association (BMRA), warns that the UK metals recycling industry – which directly employs over 15,000 people and delivers £9bn GVA annually – faces an existential threat from export controls designed to secure domestic steel supply.
Analysis demonstrates that even if every UK steel furnace transitioned to electric arc furnaces and used only scrap steel as feedstock, the country would need just two-thirds of total annual British scrap steel supply. According to the findings, a third of all UK scrap steel would still require export markets to avoid overwhelming domestic waste management systems.
The research findings come as the UK government develops its steel strategy following the ’Plan for Steel’ consultation that ran earlier this year. The consultation examined ‘how to best use and improve the UK’s capability in scrap metal processing’ as steelmakers transition to electric arc furnaces, with UK Steel having previously advocated for measures to retain more scrap domestically.
“Exports are the lifeblood of the UK metals recycling industry and global demand for recycled steel is set to rise dramatically,” said James Kelly, CEO of the BMRA. “Curtailing exports would be short-sighted and could see the UK miss out on significant growth for an already large industry.”
Economic impact modelling highlights risks
The Sheffield Hallam research modelled several policy scenarios, revealing disproportionate negative impacts across all levels of steel export restriction. A 10 per cent export quota would result in £880m lost GVA and 2,835 job losses over five years, while a complete ban on exports to non-OECD countries would devastate the sector with £4.9bn in lost value and over 20,000 jobs eliminated.
Prof Will Eadson, Professor of Urban and Regional Studies at Sheffield Hallam University, said analysis shows even modest policy changes to protect domestic recycled steel can have substantial economic effects: “Our economic models demonstrate why careful thought must be given to any measures which seek to restrict overseas trade – we can see clearly how quotas and bans may lower exports, but at a cost to the overall value of the sector.
“Our research also highlights the need for continued and deeper dialogue between government, metal recyclers, and steel producers to develop policy that meets the needs of all parties.“
Even under optimistic scenarios where 30-40 per cent of displaced exports are redirected to domestic markets and alternative export destinations, BMRA states that industry would fail to fully recover lost value. Recovery pathways prove slow and incomplete due to limited domestic demand absorption capacity and the time required to establish new international trade relationships.
Domestic market limitations
Current UK demand for recycled steel totalled 2.6 million tonnes in 2023, with further reductions following closures and reduced activity at major steel production facilities. The domestic market has experienced structural challenges including limited processing capacity for non-ferrous metals, poor payment terms extending up to 90 days, and difficulties securing credit insurance for sales to UK producers.
The research confirms that new Electric Arc Furnace plants planned for Port Talbot and potentially Scunthorpe would create opportunities for metals recyclers, but warns many businesses cannot access these opportunities without technological investment and improved links for rail freight.
Even accounting for maximum domestic steel production using recycled materials, the UK is expected to have a surplus of at least four million tonnes of recyclable metal annually, requiring continued export capacity to prevent an issue of excess scrap.
Industry warns of wider economic damage.
Business consultations reinforced modelling findings, with companies reporting median export percentages of 85 per cent of turnover. 60 per cent of the firms surveyed relied on exports for over three-quarters of their revenue, with all participants agreeing that export restrictions would prove damaging and potentially fatal to business operations.
According to the BMRA, the risks are greater because of the complexity of the metals recycling sector. Ferrous and non-ferrous markets operate differently, with virtually no UK demand for many non-ferrous materials, meaning any blanket restrictions would disproportionately harm businesses with no viable domestic alternatives.
Research participants highlighted additional sector pressures including depressed global metal demand, price volatility from tariff negotiations, supply chain disruptions, and elevated UK energy costs. Export restrictions would compound these existing challenges at a particularly vulnerable time for the industry.
Without international markets, the expected downward pressure this will create on scrap prices will result in reduced collection and recycling. This in turn, advises the BMRA, would likely increase fly-tipping and vehicle abandonment whilst creating additional landfill and storage pressures. Environmental impacts would prove counterproductive, as each tonne of recycled steel avoids 1.5 tonnes of CO2 emissions whilst recycled aluminium saves 14,000 kWh of energy per tonne.
Rather than export restrictions, the BMRA advocates for an approach that retains steel for the UK through improved market conditions. It notes the value of market diversification to absorb trade shocks through access to alternative export markets via targeted trade agreements and reduced logistical barriers.
Support for domestic recycling infrastructure requires coordination across supply chains, including additional treatment facilities for hazardous materials and expanded waste storage capacity.
