Import tariffs do not cover scrap. They cover finished metal articles, and the gain has landed mostly on the mills rather than on the yards. Steel Dynamics reported second-quarter steel selling prices up $162 a ton, or 14 percent year on year, while the metallic raw material cost feeding its furnaces rose $5 a ton, or 1 percent. That single comparison tells a scrap seller more than any tariff headline.
Scrap Price Today market analysis, written from exchange settlement data, mill and refiner pricing practice and published policy documents. Figures are examples; today’s numbers are on the live scrap price board.
The usual framing is that protection for domestic mills lifts scrap prices because mills melt scrap. The mechanism is real. The size of the transfer is the part nobody quantifies, and public company filings make it possible to.
What the measures cover, and what they leave out
The US measures apply to steel, aluminium and copper articles and to a list of derivative products. Waste and scrap sit under different tariff classifications and are not covered.
The structure was reworked in the spring: duties now apply to the full customs value of a covered article rather than only to the value of its metal content, which sharply raised the effective cost of derivative goods. A further revision in early summer widened the product list, added items such as lithographic plates and steel racks, and lowered the US-content threshold for the reduced rate from 95 to 85 percent.
The headline rate on articles made almost entirely of the covered metals is 50 percent, with 25 percent on certain derivatives and a temporary capped 15 percent for metal-intensive industrial and electrical grid equipment.
The mechanism, in the data
The chain from tariff to yard runs through imports, utilisation and mill demand, and each link is measurable.
US steel imports fell to roughly 1.9 million metric tonnes in June from about 2.0 million in May on preliminary Census figures. Domestic mills shipped 8.54 million net tons in the same month, up 4.8 percent on May and 8.7 percent on the year, with first-half shipments 5.3 percent ahead year on year according to American Iron and Steel Institute data.
So the mechanism works. Fewer imports, more domestic production, more melting, more demand for scrap. The question is what share of the resulting margin reaches the person delivering the material.
Where the money went
| Mill selling price | Mill scrap input cost | Mill volume | |
|---|---|---|---|
| Measurement | Average selling price per ton, steel segment | Metallic raw material cost per net ton consumed | Tons shipped |
| Year-on-year change | Up $162, or 14 percent | Up $5, or 1 percent | Up 7 percent |
| Who captures it | The mill | Shared between yard and seller | The mill |
| Source | Steel Dynamics quarterly filing | Same filing | Same filing |
Metallic raw material is the single largest cost in electric arc furnace steelmaking, running around 55 to 65 percent of mill operating costs by the company’s own account. When the output price rises 14 percent and the largest input rises 1 percent, the margin expansion is not subtle.
One company is not the whole industry, and a quarterly average is not a spot price. But it is audited, filed with regulators, and specific, which is more than most tariff commentary offers.
What this means if you sell scrap
- Tariff headlines are not scrap price signals. Watch your mill’s buying program, which is the number that reaches your ticket.
- Ferrous benefits first and most, because domestic melting is the transmission channel. Non-ferrous responds to exchanges instead.
- The benefit is real but diluted. Mills capture protection at the point of sale; yards compete it away only where several buyers compete for the same tonnes.
- Where you sell matters more than what the policy says. A yard with one buyer passes on less than a yard with three, as our yard pricing guide explains.
The risk runs both ways
Commercial Metals notes in its own filing that if tariffs are relaxed, repealed, successfully challenged or allowed to expire, a resurgence of imports would put downward pressure on US steel prices. It also observes that several countries have already increased rebar exports to the US despite the duties.
That is a steel producer telling its shareholders the protection is contingent. A scrap seller reading the same sentence should draw the same conclusion: the current firmness in ferrous rests partly on a policy that can change.
Copper is the case to actually watch
For copper the tariff itself is less important to scrap than what was recommended alongside it.
Copper scrap, ores, concentrates and cathodes were excluded from the duty, which covers semi-finished products and copper-intensive derivatives. But the Commerce report underlying the proclamation recommended a 25 percent domestic sales requirement for high-quality copper scrap and export controls on it, plus a phased universal duty on refined copper.
Those scrap measures were recommended, not enacted, and a market review was directed for the end of June. If they ever take effect, they would change scrap pricing directly rather than through mill demand, as our copper analysis sets out.
Key numbers
- Steel selling prices up $162 a ton, or 14 percent year on year; metallic raw material cost up $5 a ton, or 1 percent (Steel Dynamics quarterly filing, SEC EDGAR).
- Metallic raw materials are around 55 to 65 percent of electric arc furnace mill operating costs, per the same filing.
- US mills shipped 8.54 million net tons in June, up 8.7 percent year on year, with first-half shipments up 5.3 percent (American Iron and Steel Institute data).
- June steel imports fell to about 1.9 million tonnes from about 2.0 million in May (preliminary Census figures).
- The headline Section 232 rate is 50 percent of full customs value on covered articles, with the US-content threshold for the reduced rate lowered from 95 to 85 percent in the early summer revision (Federal Register proclamations; Congressional Research Service).
- Copper scrap remains outside the duty, while a domestic sales requirement and export controls on high-quality copper scrap sit as recommendations rather than rules.
How we produced this, and one limitation to flag
The company figures are taken from quarterly filings made to the Securities and Exchange Commission and are named in the text. The shipment and import figures are from industry association and Census data as reported in trade coverage. The tariff mechanics come from the proclamations and Congressional Research Service summaries.
One honest caveat about our own board. Our derived steel series is built from hot-rolled coil futures, which are a finished-steel price. The filing figures above show finished steel and scrap have diverged sharply over the past year, which means our derived steel series probably overstates the twelve-month move in actual scrap prices. We are reviewing whether to re-base it on a scrap-specific index, and until we do, treat the direction as reliable and the twelve-month magnitude as indicative.
We would rather publish that than quietly leave it. The full derivation is on the editorial policy page, today’s levels are on the live board, and our steel analysis covers the domestic and export price structure in more detail.