Governments across emerging markets are increasingly moving to restrict exports of scrap metal and other recyclable materials as they seek to secure feedstock for the domestic industry and support downstream manufacturing. The growing trend – occasionally described as ‘recycling nationalism’ – is beginning to reshape global trade flows in secondary metals, especially as it has recently reached Europe.

The European Commission has, in recent months, stepped up efforts to keep more scrap metal within the EU.

Under its Steel and Metals Action Plan unveiled in March 2025, Brussels introduced customs surveillance of ferrous, aluminium and copper scrap exports to monitor what it describes as growing “scrap leakage” to third countries. The Commission has also signalled that further trade measures – including possible export restrictions on aluminium scrap – could follow in order to secure feedstock for European recyclers and low carbon metals production.

Several European business organisations along the metal value chain have backed the initiative.

“European Aluminium strongly supports the Commission’s work on a trade instrument to ensure sufficient availability of aluminium scrap on the EU market,” commented George Karkampasis, director of circular economy and raw materials at European Aluminium. Current market developments show that EU-level action is necessary to address market distortions caused by policies in third countries, Karkampasis explained.

According to European Aluminium, aluminium scrap exports remain persistently and historically high, reaching around 1.3 million tonnes in 2025. “At the same time, strong external demand, lower labour and environmental standards in some third countries, subsidies and broader trade distortions are diverting valuable secondary raw materials away from the EU precisely when domestic demand for low-carbon inputs is accelerating,” Karkampasis said.

Remarkably, the war in the Middle East has only fuelled this trend. According to Karkampasis, disruptions affecting primary aluminium supply from the Persian Gulf are expected to increase global reliance on scrap, intensify competition for available volumes, and put additional upward pressure on prices. “This is likely to accelerate scrap leakage towards higher-paying international markets, making it even more critical for the EU to ensure sufficient availability of scrap for its domestic industry,” Karkampasis said.

Image: Tata Steel

Joining the ranks

By restricting metal scrap exports, Europe is only joining a well-established trend of countries trying to cap scrap leakage, which has been gaining momentum across emerging markets during the last few years.

Karkampasis emphasised that a growing number of third countries already apply export restrictions on aluminium scrap, including China, Vietnam, Malaysia, Indonesia, South Africa and the United Arab Emirates, while discussions are ongoing in others. “In this context, EU action would not be an outlier, but rather a proportionate response aligned with global practice,” Karkampasis said.

China was among the first major economies to tighten controls over the scrap trade. Beginning in 2018, Beijing introduced sweeping restrictions on imports of what it classified as ‘solid waste,’ sharply curbing inflows of foreign metal scrap.

Malaysia imposed a 15 per cent export duty on ferrous scrap in March 2021, and has also tightened import and export controls on metal scrap in recent years through stricter inspection and licensing rules. Indonesia moved further in July 2023, when the trade ministry enacted export prohibitions covering a range of industrial materials effective from June 2024, including ‘waste and scrap other than cast iron.’

However, analysts noted that so far, the restrictions have not led to a tangible change in global trade. From Euromonitor International’s perspective, it is important to distinguish between the narrative around scrap export restrictions and what is actually visible in trade data, commented Viktorija Stumbre, the research firm’s industrial data manager. “While scrap retention policies have received increasing attention in recent years, global scrap metal trade continues to be shaped primarily by longstanding structural patterns rather than by a clearly identifiable new shift in export behaviour,” Stumbre said.

A new level

However, if developed economies decide to join the trend toward export restrictions, this can significantly alter global trade flows.

According to Euromonitor, Western Europe and North America together account for nearly half of total world exports, with Western Europe alone contributing around one-third. At the country level, the United States and Germany stand out as the two largest exporters, together accounting for close to one-third of global scrap exports over the period. “These countries, therefore, play a central role in shaping global export dynamics,” Stumbre said.

Across most countries and regions, a temporary increase in scrap exports observed from 2021 to 2022 has been followed by a decline in the following years.

“China represents a distinct case, not because of a recent change, but due to its longstanding structural position,” Stumbre said, explaining that throughout the entire period, China has remained a very small scrap metal exporter, with exports consistently accounting for well below one per cent of domestic metal production. “This reflects a persistent model of domestic scrap absorption rather than a temporary or newly introduced policy stance,” Stumbre added.

Analysts noted that the European export restrictions could affect markets in key importers, including India, Turkey, China, Thailand and Pakistan, where metal packagers will likely feel the impact in the form of rising feedstock prices.

A double-edged sword

Restrictions on scrap exports could benefit metal packaging producers by increasing the availability of secondary aluminium and steel in domestic markets and easing competition for feedstock. Supporters of such measures also argue that retaining scrap domestically strengthens regional circular economy chains, encourages investment in local recycling and remelting capacity, and reduces dependence on imported primary metal.

However, the issue is more complex, and restrictions can eventually do more harm than good for companies along the value chain, according to Recycling Europe, a trade organisation of European recycling companies. The export restrictions create real uncertainty for European recyclers, commented Zoi Didili, the organisation’s senior communications advisor.

Image: Badford Waste Traders

When export markets are restricted, which has already been done under the new waste shipment rules, EU recyclers risk being pushed into a captive domestic market, where buyers have more power and prices can be artificially depressed. “That weakens margins, discourages collection and processing, and can redirect trade flows without necessarily increasing recycling in Europe,” Didili said.

“The core issue is that Europe does not have sufficient domestic demand to absorb all recycled materials. To increase the demand for recycled metals in the EU, policy measures such as a ‘green steel label’ should reward circularity and the uptake of recycled materials.”

More feedstock staying on the domestic market may provide temporary support to metal packagers, but as the recycling industry is pushed to the brink of survival, the positive impact will likely be only short-lived.

In Recycling Europe’s view, imposing a new set of trade restrictions on scrap would mean sacrificing Europe’s recycling industry for the sake of producers, Didili said.

Didili also stressed that recycled metals are essential for lower-carbon production, but recyclers need functioning, open markets to keep collecting, sorting and investing – especially now that Europe is trying to become materialsovereign and reduce its dependence on thirdcountry supply of raw materials. “Restricting exports may look like a way to retain materials in Europe, but if it depresses prices and weakens recyclers, it is without a doubt that it will also reduce recycling activity altogether,” Didili said.

European recyclers believe that the priority should be to boost EU demand for recycled metals, invest in recycling capacity and reward circularity – not penalise recyclers for selling their surplus where there is actual demand, a condition that is still not sufficiently met within the EU.

A balanced approach needed

European Aluminium also calls for a balanced approach that would ensure that all segments of the value chain will stay afloat. “We understand the concerns from collectors and processors, which are part of the aluminium value chain,” Karkampasis said.

“The objective is not to disadvantage any segment of our value chain, but to address a clear market imbalance that is undermining the availability of a strategic secondary raw material in Europe. This is why we do not advocate a blanket export ban,” he added.

According to European Aluminium, a pricebased duty would allow exports to continue where economically justified, while ensuring that Europe does not lose strategic secondary raw material because of distorted global market conditions, lower environmental standards, subsidies or arbitrage created by third-country trade measures.

Observers note that against the backdrop of escalating trade tensions, including the tariff policies introduced under Donald Trump, the ongoing US-China trade frictions, and geopolitical disruptions such as the conflict involving Iran, protectionist industrial policies are gaining renewed traction globally. As governments increasingly prioritise supply security over market efficiency, the logic behind ‘recycling nationalism’ is likely to strengthen rather than fade in the foreseeable future.

In a final comment from Metal Packaging Europe (MPE) CEO, Krassimira Kazashka, said: “Metal Packaging Europe supports trade measures that strengthen the entire value chain and secure the availability of secondary raw materials, reinforcing a more circular and competitive European metals value chain. High-quality steel and aluminium scrap are essential strategic resources to support Europe’s circular economy objectives. Exporting high quality scrap means increasing dependency on primary materials and undermines the circularity ambition in Europe and the decarbonisation efforts of the entire value chain.  

“Europe must protect its own resources, and high-quality scrap is one of them. The priority should be to create the right framework conditions for recycling investments in Europe through effective collection & sorting infrastructure, high recycling performance, and strong recycling capacity. Open markets and resource security can coexist, but Europe must ensure that valuable secondary raw materials remain available to support climate and circularity ambitions.”