Key takeaways
- Scrap has no exchange: prices emerge from thousands of local negotiations over different grades. An index condenses this fragmented market into one number comparable over time.
- FT Mercati publishes three scrap indices — ferrous, non-ferrous and stainless — in euros per tonne, updated weekly. Each index is the average of its family's categories; subscribers also access the roughly 50 weekly quotations of the individual categories.
- Each index has its own drivers: ferrous follows steel mills and exports; non-ferrous follows the LME metals (copper first); stainless mostly follows the nickel contained in the alloy.
- In contracts the index serves as an indexation base: the price is pegged to the reference plus or minus an agreed differential, instead of renegotiating at every delivery.
- Scrap is excluded from CBAM (CN 7204 and 7602): a competitive advantage for recycling that makes these numbers even more central in the coming years.
Why there is no single scrap price
Unlike copper or aluminium, scrap has no world exchange: it trades in a fragmented physical market of merchants, recyclers, foundries and steel mills, with prices that shift with grade, size, cleanliness, geography and even that week's freight cost.
The result: two operators can close the same scrap class on the same day at different prices, and both can be "right". Navigating this requires a third-party reference that condenses the market — which is what an index does. Not the price of one transaction, but a number that photographs the trend, and that, read as a time series, tells you whether the market is rising, falling or turning.
The three FT Mercati indices: ferrous, non-ferrous, stainless
FT Mercati publishes three scrap indices, all in euros per tonne and updated every week — the natural pace of a market that does not move prices minute by minute.
The ferrous scrap index follows the raw material of electric steel mills: its engines are steel orders, construction and engineering cycles, exports and energy costs. The non-ferrous index follows copper, aluminium and other alloy scrap: it moves in the wake of the LME metals, with discounts reflecting grade and yield. The stainless index follows stainless steel scrap, whose value lies mostly in the nickel (and chromium) contained in the alloy: when nickel runs, stainless follows.
Mind, though, what each index technically is: an average of its family. The non-ferrous index, for instance, condenses into one number the readings for copper, aluminium, lead and the other categories. For the overall trend it is the right synthesis; whoever buys or sells a specific grade works on the individual items: FT Mercati subscribers access every week some fifty quotations for single scrap categories — from loose light steel sheet to shredded scrap (proler) among the ferrous grades, from aluminium turnings to copper cable ends — of which the public indices are the extreme synthesis.
The three series, side by side on the same page, tell three different markets that often diverge: a quarter can pass with ferrous flat, non-ferrous rising with copper, and stainless falling with nickel. That cross-reading is precisely the value of the indices.
How to read an index (and how not to)
An index is read in two ways: the level, to compare today with history, and the change, to grasp the direction. For scrap buyers and sellers the second matters most: the index will rarely match the exact price of your own negotiation — grade and logistics make the difference — but its weekly change is the yardstick for updating your positions.
Two mistakes to avoid. First: using the index as a price list ("the index says X, so my scrap is worth X") — the index is an average snapshot, not the price of a single lot. Second: reading it alone — non-ferrous belongs next to LME copper, stainless next to nickel, ferrous next to the steel cycle: comparison is what reveals whether a move is local or fundamental.
Indices in contracts: indexation
The most valuable use of an index is contractual. In recurring supplies, instead of renegotiating at every delivery, the parties peg the price to the reference: the index (or its average over a period) plus or minus an agreed differential reflecting the grade, yield and logistics of the specific supply.
The typical clause fixes four things: which index governs, over which period it is calculated (delivery week, monthly average), the agreed differential, and what happens in edge cases (index not published, abnormal jumps). A public third-party reference takes the most sterile argument off the table — "the market fell" / "no, it rose" — and leaves the negotiation only what is truly specific to the supply.
Scrap, CBAM and EU rules: why recycling is advantaged
Europe's regulatory framework is making scrap more strategic. CBAM — the EU's carbon border charge, definitive since 2026 — expressly excludes scrap: both ferrous (CN 7204) and aluminium scrap (CN 7602) can be imported with no CBAM obligations or costs, while imported primary metals will carry a CO₂ cost growing until 2034. Other things equal, recycled material gains competitiveness year after year.
On the opposite front, exports: the new EU Waste Shipments Regulation (2024/1157) makes scrap exports to non-OECD countries conditional, from 21 May 2027, on those countries demonstrating sustainable waste management. Fewer export outlets can mean more material available in Europe — a factor to monitor precisely through the indices.
Frequently asked questions
How often are the scrap indices updated?
Weekly: the natural pace of a physical market that does not reprice every minute. On the FT Mercati scrap page you find the current value and the history of each of the three indices.
Why does the index differ from the price I am offered?
Because the index is an average of its scrap family, not the price list of a single lot: grade, size, cleanliness, yield and freight move the actual price. The index measures direction and serves as a contractual base; for your specific grade — from loose light sheet to copper cable ends — subscribers have the roughly 50 weekly readings for individual categories.
Does scrap pay CBAM?
No: ferrous scrap (CN 7204) and aluminium scrap (CN 7602) are excluded from the CBAM scope — no authorisation, declaration or certificates. It is one reason recycling gains competitiveness against imported primary metal. The topic is covered in depth in our CBAM guide.
How do the scrap indices relate to LME prices?
Non-ferrous moves in the wake of the LME metals (copper first) with discounts for grade and yield; stainless mostly follows nickel; ferrous has drivers of its own — steel mills, construction, exports, energy — and no LME contract of reference in the European physical market.
How do I put an index into a supply contract?
Fix four elements: the governing index, the calculation period (delivery week or monthly average), the agreed differential versus the index, and the clause for edge cases. The price then follows the market without renegotiating every delivery.
Sources
References for this guide:
This guide is market information, not legal or commercial advice: for your company's contracts, consult your advisors.