The pattern has prompted growing concern across the industry, with some questioning whether metals recycling could be heading in the same direction as plastics recycling – which has faced sustained financial pressure and plant shutdowns in recent years.
Recent closures, liquidations and acquisitions have included Unimetals, Enablelink, Acetech Metals, H Ripley & Co and CF Booth, with industry sources warning that more closures may be around the corner.
Rising costs and expansion pressures
Rising operating costs are among the most visible pressures facing recyclers.
Explaining its appointment of administrators, CF Booth cited “significant trading difficulties” exacerbated by high energy prices and copper price volatility, alongside increases to the National Living Wage, environmental compliance costs, VAT and health and safety penalties.
James Kelly, CEO of the British Metals Recycling Association (BMRA), explained: “BMRA is saddened by the news of recent closures following a year that has proven to be very challenging for metals recycling businesses.
“Global uncertainty, combined with a lack of scrap and the high cost of running a business in the UK have all contributed to this difficult operating environment – this looks likely to continue well into 2026.”
While these challenges are being felt across much of UK industry, they have hit metals recyclers particularly hard. Some sources have also pointed to over-expansion over the past decade, as traditionally small, local businesses were consolidated into larger groups with higher fixed costs and greater exposure to volatile global markets.
However, these factors alone do not fully explain the scale of disruption now being seen.
Steelmaking transition hits domestic demand
Many in the sector point instead to the collapse and transition of UK steelmaking as a decisive factor.
The UK scrap market is currently grappling with what has been described as a structural oversupply – not because scrap arisings have increased, but because domestic demand has fallen sharply.
Since 2024, the UK has seen:
- Tata Steel shut down its final blast furnace at Port Talbot, with a new electric arc furnace (EAF) not expected until late 2027
- British Steel placed on government “life support” to prevent the closure of the UK’s last two blast furnaces at Scunthorpe
- Liberty Steel’s speciality operations entering government-backed receivership
According to data from World Steel Association, domestic steel production fell below four million tonnes in 2025, historic lows that have left the UK reliant on imports for around 70% of its steel needs.
The percentage of scrap used in the remaining blast furnaces is between 15-25%, while EAFs will be capable of using up to 100% scrap input. Because of the closures, metal recyclers, have seen a key domestic outlet missing.
Scrap that would previously have gone into UK furnaces and mills is now being pushed into export markets that are often more competitive, less predictable and slower to pay. At the same time, demand from the construction and automotive sectors remains subdued.
Export markets offer limited relief
Exporting scrap has done little to ease pressure on recyclers’ finances, and may be under threat from policy changes that could make conditions even worse.
Long payment cycles can leave operators waiting months to be paid, placing strain on cashflow at a time when working capital is already tight. Trade friction has increased following the introduction of the US tariffs and changing global trade rules, while logistics costs remain elevated.
On top of these market pressures, the sector has raised concerns about potential government restrictions on the export of recycled metals.
The BMRA has warned that export bans, quotas or other limitations could not only undermine the viability of metals recyclers, but also have a “ripple effect” across the supply chain, from equipment manufacturers and logistics firms to insurers and payment service providers.
‘Green steel’ risks leaving recyclers behind
The current situation has highlighted what could be seen as a policy contradiction.
Once operational, electric arc furnaces such as Tata Steel’s £1.25 billion EAF project at Port Talbot will rely heavily on high-quality scrap as feedstock. However, recyclers say that despite the UK’s stated commitment to “green steel”, the legislative and financial support needed to sustain the scrap supply chain has yet to materialise.
The BMRA has repeatedly called on government to provide greater support, including bringing the sector into scope of the British Industrial Competitiveness Scheme (BICS) to reduce electricity costs, and unlocking funding through the National Wealth Fund.
Kelly added: “As we have outlined in our Agenda for Change, there are many areas Government could support the metals recycling industry.”
The risk is that, without intervention, scrap processing capacity will be lost before domestic steel demand returns.
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