UK Steel Price Forecast 2026–2027

UK steel prices are at or near the bottom of the current cycle. The second half of 2026 brings tighter trade protection, but a genuine recovery is more likely in 2027 when the UK CBAM adds a carbon cost to imported steel. Here's what the data shows.

Where Prices Stand Now (April 2026)

The CFR Turkey HMS 1/2 (80:20) benchmark — the global reference price for ferrous scrap — sits at approximately $384 per tonne as of early April 2026. This represents a modest recovery from the start of the year, with prices up roughly 5.3% since January, when they touched around $365/t. In Q1 2026, prices peaked at $388.3/t in late March — the highest level since July 2024 (GMK Center).

However, the April outlook carries a mild downside bias. The Fastmarkets Trend Indicator for April posted at 46.9, below the neutral 50 threshold, consistent with a forecasted 3.1% month-on-month decline. Buy-side sentiment is weakest at 40.7, while brokers and sellers remain neutral (Fastmarkets).

H2 2026: New UK Safeguard Measures (July 2026)

The biggest near-term catalyst for UK steel prices is the new trade defence mechanism taking effect 1 July 2026, replacing the existing safeguard that expires 30 June. The changes are substantial (GOV.UK):

• Import quotas cut by 60% from current levels
• Out-of-quota tariff doubled to 50% (from the current 25%)
• Coverage expanded to include all steel products produced in the UK
• Applies to all trading partners, regardless of free trade agreements

This creates a much tighter regulatory floor under domestic steel prices. The government's stated aim is to raise domestic steel production to meet 50% of national demand, up from the current 30% (Hooper & Co).

For scrap steel specifically, tighter import restrictions on finished steel should support domestic steelmaking, which in turn supports scrap demand. However, this effect is indirect and may take several quarters to flow through to yard prices.

2027: The UK CBAM Changes Everything

The UK Carbon Border Adjustment Mechanism (CBAM) takes effect 1 January 2027. This is the single most significant policy change for UK steel pricing in a decade (ICAEW).

The CBAM puts a carbon price on imported steel, aluminium, cement, fertiliser, and hydrogen. For steel, analysts estimate it could add £30–130 per tonne to the cost of imports, depending on the carbon intensity of the producing country (IndexBox). The CBAM rate will be adjusted quarterly, reflecting the average UK ETS price.

This matters for scrap because recycled steel has a significantly lower carbon footprint than virgin steel. Electric arc furnace (EAF) steelmaking from scrap produces roughly 0.4 tonnes of CO2 per tonne of steel, versus 1.8 tonnes from blast furnace production. As the CBAM raises the cost of carbon-intensive imports, domestically recycled steel becomes more competitive — supporting scrap demand and prices.

Bearish Factors: What's Holding Prices Down

• Global oversupply: World steel capacity is projected to surge by 165 million tonnes by 2027, while demand grows at just 0.7% per year. Capacity utilisation could fall to ~70% (SteelOnTheNet)
• Weak Turkish demand: Turkey is the UK's largest scrap export market. Rebar sales remain soft and mill margins are thin, limiting Turkish appetite for imported scrap
• European construction slowdown: UK and EU construction activity remains below trend, reducing domestic steel demand

Bullish Factors: What Could Push Prices Up

• UK safeguard tightening (July 2026): 60% quota cuts and 50% tariffs create a price floor for domestic steel
• UK CBAM (January 2027): £30–130/t cost increase on carbon-intensive imports makes recycled steel more competitive
• Supply constraints in Europe: Scrap availability in the EU and UK tightened in Q1 2026, with sellers holding firm on pricing
• Green transition: Growing demand for low-carbon steel benefits EAF production and scrap demand long-term

Our Assessment

The CFR Turkey benchmark is likely to remain rangebound between $350–400/t through the rest of 2026, with the balance of risks tilting slightly upward in H2 as safeguard measures take effect. UK yard prices for HMS 1 should hold in the £0.18–0.25/kg range.

The real inflection point is January 2027 when the CBAM crystallises. If the carbon price adds even £50/t to import costs, it fundamentally changes the economics of UK steelmaking in favour of domestic recycled steel. That's when scrap demand — and scrap prices — should see a more meaningful uplift.

We'll update this forecast as new data becomes available. Check our homepage for the latest daily prices.