- Facility to produce around 3-3.2 million tonnes of crude steel
- Port Talbot to require over 2 million tonnes of scrap annually
Tata Steel plans to commence construction of its electric arc furnace (EAF) at Port Talbot in July 2025, with commissioning targeted for FY2027-28, according to its FY2024-25 annual report.
Backed by GBP 500 million in UK government support, the $1.5 billion investment marks a strategic pivot away from the blast furnace–basic oxygen furnace (BF-BOF) route toward a lower-emission, scrap-based EAF model.
What will be the impact on UK scrap demand and exports?
As per market insiders, once the Port Talbot EAF comes online, it’s set to become one of the UK’s largest scrap consumers, drawing over 2 million tonnes annually to produce around 3-3.2 million tonnes of crude steel. That means a substantial volume of scrap, which currently feeds the export market, will be redirected to domestic use.
With scrap expected to make up 70-80% of the furnace’s charge, exports are likely to come under pressure, making UK-origin scrap less available to overseas buyers.
How will the transition affect the domestic market?
With Port Talbot set to become a major consumer of scrap, the UK market is likely to face a supply crunch. A facility to draw over 2 million tonnes annually will significantly reduce the volume available for export, shifting attention to domestic sourcing.
This shift could prompt new investment in collection networks and processing capacity as the market adjusts to rising demand and limited availability. For traders and recyclers, competition for prime grades is expected to heat up, potentially redrawing price levels and trade flows that have long shaped the UK’s position as a major scrap exporter.
In 2024, the UK exported around 7.5 million tonnes of ferrous scrap, with 1.9 million tonnes shipped in the first quarter of 2025. India and Pakistan together accounted for nearly 25% of that Q1 volume, roughly 0.45 million tonnes. Once Tata’s EAF becomes operational, a sizeable share of this outbound material may be retained for domestic use, potentially tightening supply for key import markets in South Asia and adding new volatility to global scrap trade flow.
What does this mean in the wider context of European steelmaking?
Tata Steel’s shift to EAF-based production aligns with a broader decarbonisation push across Europe, where steelmakers are moving away from the BF–BOF route to meet stricter carbon targets. The Port Talbot transition, by significantly increasing domestic scrap consumption, reflects growing regional competition for ferrous scrap as EAF capacity expands. This structural change is expected to influence cross-border scrap flows, pricing, and investment in recycling infrastructure across the UK and Europe.
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