How is the price of scrap metal actually determined?

The export of scrap iron

Because the Netherlands has virtually no capacity for remelting scrap iron, nearly all of the scrap iron generated in our country is exported. A small portion of this goes to neighboring Germany, which is home to many steel producers that use scrap iron as a base raw material. However, the bulk of the scrap iron generated in the Netherlands is exported to Turkey, Egypt, and India. Since purchases of scrap iron are primarily made in euros and sales are often made in U.S. dollars, the euro/dollar exchange rate also influences the price. A strong dollar contributes to a strong export market for scrap iron.

The Port of Rotterdam

With Rotterdam, the Netherlands is home to the largest port in Europe and one of the largest ports in the world. From here, the scrap iron is typically loaded onto large ocean-going vessels with a capacity of between 30,000 and 45,000 metric tons. These ocean-going vessels then sail to their destination, where the scrap is remelted into a new product. This gives the Netherlands a distinctive competitive advantage in the European scrap metal market.

The quality of the scrap iron

But of course, factors such as purity and quality also influence the scrap iron price. Factories generally have complete freedom to choose where they source their materials—the Netherlands, Belgium, the United States, Canada, etc. They may pay more or less depending on the country or continent. That is why many Dutch scrap metal companies invest in employee training and the purchase of purification equipment to improve the quality of scrap iron and thus maintain the Netherlands’ competitive position in the global scrap metal market.