Steel Scrap Grades — The Complete Global Classification Guide

Steel scrap is the most recycled material on earth. Globally, over 630 million tonnes of ferrous scrap are consumed annually in steelmaking — feeding electric arc furnaces, induction furnaces, and supplementing blast furnace charges across every steel-producing nation. But not all scrap is equal. The grade of scrap you charge into a furnace determines your yield, your electricity bill, your slag volume, your finished steel chemistry, and ultimately, your margin per heat.

This guide classifies every major ferrous scrap grade using the ISRI (Institute of Scrap Recycling Industries) global standard system. For each grade, you’ll find the specification, physical characteristics, melting behaviour, and which furnace types prefer it. Whether you’re operating an induction furnace, running an EAF melt shop, trading scrap internationally, or procuring feedstock for a mini-mill, this is the reference that eliminates ambiguity from every scrap transaction.

Use our Scrap Yield Calculator to model the exact yield for your charge mix, or the Scrap-to-Steel Production Cost Calculator to build a complete cost waterfall from scrap to finished product.

The Universal Principle: Why Grade Classification Exists

Scrap classification exists because furnace economics are grade-dependent. Four characteristics differ between grades, and each directly affects the cost of producing a tonne of liquid steel.

Bulk density determines how much metal fits per furnace charge. A furnace has a fixed internal volume. Shredded scrap at 0.9–1.2 tonnes per cubic metre fills that volume with far more metal than loose turnings at 0.3–0.5 t/m³. Higher density means fewer charges per heat, less time between taps, and lower energy consumption per tonne — because the furnace spends less time recharging and more time melting.

Chemical cleanliness determines yield and product quality. Clean HMS 1 with no coatings, oil, or non-metallic attachments yields 90–93% liquid steel. Contaminated turnings carrying cutting oil, aluminium chips, and mixed non-ferrous metals may yield only 82–87%. The 5–10 percentage point yield difference means that for every 100 tonnes charged, you get 5–10 fewer tonnes of saleable steel — a direct cost.

More critically, residual elements that enter through contaminated scrap — copper, tin, chromium, nickel — cannot be removed during the melting process. They become permanent residents in the finished steel. If residual copper exceeds 0.20% in construction-grade rebar, the steel may fail specification. This is why scrap chemistry is not just a cost issue — it’s a quality control issue.

Piece size affects melting dynamics. Optimal melting requires a mix of piece sizes. Very large pieces take longer to melt but charge efficiently. Very small pieces melt rapidly but may “bridge” in the furnace — forming a scaffolding structure that traps unmelted material above the molten bath. The ideal charge combines dense base pieces (HMS 1, plate) with smaller filler material (shredded, busheling) for both efficient charging and uniform melting.

Surface condition determines fume generation and environmental load. Painted, oiled, galvanised, or soil-contaminated scrap generates volatile emissions during melting. Zinc from galvanised steel creates zinc oxide fumes. Oil generates hydrocarbon emissions. These must be captured by the fume extraction system, increasing operating cost and regulatory compliance burden.

HMS 1 — Heavy Melting Steel No. 1: The Global Benchmark

HMS 1 is the reference grade against which all other ferrous scrap is priced and evaluated worldwide. It is the backbone of international scrap trade.

ISRI specification: Wrought iron and/or steel scrap, minimum ¼ inch (6.35mm) thick. Must not contain galvanised or blackened (tin/lead-coated) steel. Maximum piece dimensions vary by sub-code: ISRI 200 allows pieces up to 60 × 24 inches (1,524 × 610mm). ISRI 201 restricts to 36 × 18 inches (914 × 457mm) for easier handling. ISRI 202 allows 60 × 18 inches (1,524 × 457mm).

Physical characteristics: Bulk density of 0.7 t/m³ or higher. The minimum thickness requirement ensures that every piece has substantial mass relative to its surface area, which means efficient energy transfer during melting and minimal oxidation loss.

What HMS 1 includes: Heavy structural steel (beams, columns, plates, channels, angles) from demolition. Industrial machinery and equipment. Rail sections and railway components. Ship-breaking plates and structural sections. Heavy plate off-cuts from fabrication shops. Any wrought iron or steel that meets the thickness and coating requirements.

What HMS 1 excludes: Galvanised steel (zinc-coated roofing, ducting, GI pipes). Blackened steel (tin-plated or lead-coated). Sheet metal below ¼ inch. Auto body panels. Coated or painted material (while some paint is tolerated, heavy coatings are excluded). Any new (prompt) industrial scrap — HMS is exclusively obsolete scrap.

Melting performance: In an induction furnace, HMS 1 yields 90–93% liquid steel. In an EAF, yield is 89–93%. The remainder — 7–10% — becomes slag (primarily iron oxide, silica, and lime) and fume losses. Electricity consumption when melting HMS 1 is at the lower end of the range because the dense, clean pieces couple efficiently with the induction field (in IF) or absorb arc energy effectively (in EAF).

Trading practice: HMS is the most liquid ferrous scrap commodity in international trade. It is typically sold in blends rather than as pure HMS 1 or HMS 2. Standard blend ratios include 80:20 (premium blend — 80% HMS 1, 20% HMS 2), 70:30 (standard commercial grade), and 60:40 (economy blend). The blend ratio should be explicitly agreed in every contract, as it directly determines the weighted average yield and value of the consignment.

HMS 2 — Heavy Melting Steel No. 2: The Workhorse Grade

HMS 2 is the high-volume, lower-cost counterpart to HMS 1. It sacrifices some chemistry purity for broader material inclusion.

ISRI specification: Wrought iron and/or steel scrap, minimum ⅛ inch (3.175mm) thick. May include galvanised and blackened steel. ISRI 203 is the basic HMS 2 classification. ISRI 204 restricts pieces to 36 × 18 inches. ISRI 205 may include properly prepared automobile scrap (free of sheet iron or thin gauge material). ISRI 206 allows pieces up to 60 × 18 inches including auto scrap.

Physical characteristics: Bulk density of 0.5–0.7 t/m³ — notably lower than HMS 1. The thinner minimum gauge (⅛ inch vs ¼ inch) and the inclusion of lighter automotive and galvanised material reduce the average piece mass and density.

Key distinction from HMS 1: The inclusion of galvanised steel. When zinc-coated scrap melts, the zinc vaporises at approximately 907°C — well below the steel melting point of ~1,500°C. This creates zinc oxide fumes that must be captured by the furnace’s fume extraction system. The environmental and operational cost of handling these fumes is a real factor in HMS 2’s lower value relative to HMS 1.

Melting performance: Liquid steel yield in IF is 88–91%, approximately 2 percentage points below HMS 1. In EAF, 87–91%. The lower yield reflects the thinner material (more surface oxidation per unit mass), the galvanised content (zinc loss), and generally higher levels of non-metallic attachments.

Economics vs HMS 1: The typical price discount for HMS 2 versus HMS 1 is 2–5% in global markets. Whether this discount compensates for the lower yield depends on the specific price spread — a narrow spread favours HMS 1, while a wider spread makes HMS 2 economically attractive despite the yield penalty.

Shredded Scrap — The Premium Processed Grade

Shredded scrap represents the highest level of processing in the ferrous scrap value chain. It commands a consistent premium over HMS because it is, simply, the most furnace-efficient feedstock available.

How it’s made: End-of-life vehicles, white goods (refrigerators, washing machines, dryers), and other complex steel products are fed through industrial shredders — massive hammer mills that reduce the material to fist-sized fragments in seconds. The shredded output passes through magnetic separation (extracting ferrous from non-ferrous), air separation (removing lightweight non-metallics), and sometimes eddy current separation (removing aluminium and copper). The result is a clean, dense, homogeneous ferrous product.

ISRI classification: ISRI 210 (shredded scrap, magnetically separated, minimum density 50 lbs/ft³). ISRI 211 (same specification, from automobile shredders — also called “automobile shredder residue” or “frag”). ISRI 212 and 213 cover variations in density and composition.

Physical characteristics: Bulk density of 0.9–1.2 t/m³ — the highest of any common scrap grade. Piece size is uniform (typically 50–150mm), which eliminates bridging and ensures consistent melting behaviour. The magnetic separation process removes most non-ferrous contamination.

Melting performance: Yield of 91–93% in IF, 90–93% in EAF. The high density means maximum metal per charge. The uniform piece size means predictable melting kinetics. The clean composition means consistent chemistry. For furnace operators who value reliability and throughput, shredded scrap is the optimal feedstock — if the price premium justifies it.

Global supply context: Shredded scrap availability is directly linked to auto scrappage rates and appliance replacement cycles. Developed economies with high vehicle ownership and regular replacement cycles (US, EU, Japan) generate abundant shredded scrap. Developing economies with younger vehicle fleets generate less. The global Vehicle Scrappage Policies being adopted across markets are expected to increase shredded scrap supply over the coming decade.

#1 Busheling — New Industrial Scrap: The Cleanest Grade

Busheling is fundamentally different from all other grades discussed so far. It is new (prompt) scrap — material generated during manufacturing, not from demolished or dismantled items.

ISRI specification: ISRI 207 defines #1 busheling as new, clean steel scrap — stampings, clippings, and off-cuts — not exceeding 12 inches in any dimension. The material must be free of metallic coatings, oil, and non-metallic contaminants.

Sources: Automotive stamping plants (body panels, fenders, structural members cut from coils). Appliance manufacturing (washer drums, refrigerator panels). Cold rolling mill edge trim and reject sheets. Tube mill off-cuts. Any manufacturing process that cuts or stamps sheet steel generates busheling.

Why it commands a premium: Busheling has known, controlled chemistry — it comes from steel that was recently produced to a specific grade specification. There are no residual unknowns (tramp copper, tin, lead) because the material was never exposed to joining, coating, or contamination in service. Yield is 92–95% in IF and 91–95% in EAF — the highest of any scrap grade.

Limitation: Availability is tied to manufacturing activity. During industrial downturns, busheling supply shrinks along with production volumes. Its supply is also geographically concentrated near manufacturing clusters — automotive regions (Detroit, Stuttgart, Chennai-Pune, Guangzhou) generate the most.

Plate & Structural Scrap — Heavy, Clean, and Premium

ISRI code 232 covers plate and structural scrap — heavy plate and structural steel sections (beams, channels, angles) that are cut to furnace-charging dimensions.

This grade overlaps with HMS 1 in quality characteristics but is traded separately when the material consists predominantly of heavy plate or structural members. Ship-breaking scrap falls into this category — hull plates, deck plates, and structural sections from decommissioned vessels are among the heaviest and cleanest scrap available.

Physical characteristics: Bulk density 0.8–1.1 t/m³. Minimum thickness typically 6mm or above. Pieces are dense, heavy, and clean — the ideal furnace charge.

Melting performance: Yield of 91–94% in IF, 90–94% in EAF. Comparable to or slightly better than HMS 1 due to the heavier gauge and minimal contamination.

Turnings, Borings & Chips — The Problematic Grade

Turnings are the curly metal chips produced by lathes, milling machines, CNC machines, and drilling operations. Borings are fine particles from boring and grinding processes.

ISRI classification: ISRI 220 — clean steel or wrought iron turnings, free of iron borings, non-ferrous metals, scale, or excessive oil. ISRI 221 — same but may include iron borings. ISRI 224 — cast iron borings and drillings, free of steel turnings. ISRI 225 — mixed cast iron and steel turnings.

The problems with turnings: Their extremely low bulk density (0.3–0.5 t/m³ loose) means a furnace can charge only a fraction of its designed capacity per batch. The high surface-area-to-volume ratio causes aggressive oxidation during melting, reducing yield to 82–87%. And turnings almost always carry cutting fluid contamination — typically 3–8% oil by weight — which generates smoke, hydrocarbon emissions, and reduces usable iron content.

Briquetting as a solution: Hydraulic presses can compress loose turnings into dense pucks (briquettes) with bulk density of 3.0–5.0 t/m³. Briquetted turnings charge far more efficiently and yield 85–90% — substantially better than loose material. Centrifuging to remove cutting oil before briquetting further improves quality. The briquetting cost (equipment, energy, handling) must be offset by the improved furnace economics.

When turnings make economic sense: Only when the price discount versus HMS is large enough to compensate for the yield penalty, the higher electricity consumption per tonne of liquid steel, and the increased fume handling cost. As a general rule, turnings need to be priced 25–35% below HMS 1 to achieve equivalent effective cost per tonne of liquid steel.

Use SteelMath’s Scrap Yield Calculator to model the exact economics for your furnace type and charge mix.

Cast Iron Scrap — A Separate Market

Cast iron scrap is classified separately from steel scrap because of its fundamentally different chemistry — high carbon content (2.5–4.5%) and high silicon (1–3%).

ISRI classification: ISRI 250 — clean cast iron scrap, cupola size (150 lbs or less). ISRI 251 — clean automobile cast iron (engine blocks, manifolds, brake drums). ISRI 254 — malleable iron scrap. ISRI 257 — clean machine cast iron.

Where it comes from: Engine blocks, machine tool bases and beds, manhole covers, pipe sections, foundry returns and risers, brake rotors and drums, and any castings reaching end of life.

Not interchangeable with steel scrap: The high carbon and silicon content makes cast iron scrap unsuitable for most construction and structural steel production via IF or EAF. If charged into a furnace producing low-carbon steel, the carbon must be removed through oxidation — a time-consuming and energy-intensive process that reduces throughput.

Primary consumers: Iron foundries producing castings (automotive, pump, valve, machine tool industries). Some speciality induction furnaces producing pig iron or high-carbon steel grades. Blast furnaces occasionally use cast iron scrap as a supplementary charge.

Melting performance: Yield of 85–88% in IF, 84–88% in EAF. The higher losses reflect the oxidation of carbon and silicon during melting, which generates voluminous slag.

Stainless Steel Scrap — An Entirely Separate Value Chain

Stainless steel scrap is classified, traded, priced, and consumed entirely separately from carbon steel scrap. The value is driven by the alloying elements — chromium, nickel, and molybdenum — not by the iron content.

Key grades: SS 304 scrap (18% Cr, 8% Ni): trades at approximately 3–4× the price of HMS 1 globally. SS 316 scrap (16% Cr, 10% Ni, 2% Mo): higher still due to molybdenum content. SS 202/201 scrap (lower nickel, higher manganese): priced between carbon steel and 304 scrap. SS 430 scrap (ferritic — 16% Cr, no nickel): lower value due to absence of nickel.

Critical importance of grade identification: Mixing 304 and 430 scrap (which look identical visually) results in significant financial loss — 430 is worth a fraction of 304. Portable XRF (X-ray fluorescence) analysers are standard equipment in the stainless scrap trade for rapid, non-destructive alloy identification. Never trade stainless scrap without verifying the grade.

Consumers: AOD (Argon Oxygen Decarburisation) furnaces at stainless steel producers. Speciality alloy foundries. Stainless scrap does not substitute for carbon steel scrap in standard IF or EAF operations producing construction-grade steel.

Choosing the Right Grade: The Effective Cost Framework

The cheapest scrap per tonne purchased is not necessarily the cheapest scrap per tonne of liquid steel produced. What matters is the effective cost — purchase price adjusted for yield, energy consumption, and processing losses.

The formula is:

Example comparison:

If HMS 1 costs $350/MT and yields 91%: effective raw material cost = $350 / 0.91 = $384.62/t of liquid steel.

If turnings cost $230/MT and yield 84%: effective raw material cost = $230 / 0.84 = $273.81/t of liquid steel.

The turnings look cheaper — but add higher electricity consumption (turnings need ~700 kWh/t vs ~600 kWh/t for HMS 1 due to lower density and longer melt times) and higher fume extraction costs. Use the Scrap-to-Steel Production Cost Calculator to run the complete comparison with your own input costs.

General charge mix guidelines by furnace type

For induction furnaces producing construction-grade long products: 60–70% HMS 1 or shredded, 15–25% DRI/sponge iron, 10–15% in-house returns. Adjust HMS 2 content based on price spread versus HMS 1. Limit turnings to 5–10% of charge unless price heavily discounts them.

For EAF operations producing flat or long products: greater flexibility with grade mix due to larger furnace size and oxygen lancing. HMS 2 and plate scrap commonly used alongside HMS 1. Shredded preferred for charging efficiency. DRI can be fed continuously through the furnace roof.

For foundries producing castings: cast iron scrap is primary feedstock, supplemented by pig iron and foundry returns. Steel scrap added selectively to adjust carbon content.

The Global Scrap Supply Picture

Global ferrous scrap trade is estimated at approximately 100–110 million tonnes per year, with the largest flows moving from the US, EU, UK, and Japan to Turkey, India, South and Southeast Asia, and the Middle East.

The US is the world’s largest scrap exporter, with deep-sea HMS-grade material flowing primarily to Turkey and South Asian buyers. European scrap moves to Turkey and increasingly to Asian markets depending on freight economics. Japan and Australia supply scrap to Southeast Asian EAF operators.

Scrap availability in any market is a function of three factors: the age of the existing steel stock (older infrastructure generates more scrap), the rate of demolition and replacement activity, and the efficiency of the collection and processing system. Developed economies with mature infrastructure generate approximately 400–500 kg of scrap per capita annually, while developing economies generate 100–200 kg.

The long-term trend is clear: as the global economy decarbonises, scrap-based steelmaking (EAF/IF) will grow relative to ore-based steelmaking (BF-BOF). The EAF route produces 0.4–0.8 tonnes of CO₂ per tonne of steel versus 2.0–2.5 tonnes for BF-BOF. This structural shift means scrap demand will grow, scrap classification will become more rigorous, and the premium for clean, well-graded scrap will increase.

Understanding scrap grades is not just current operational knowledge — it’s preparation for the direction the global steel industry is heading.

Data Sources & Verification

• ISRI Scrap Specifications Circular 2017: HMS 1 (200–202): ≥¼” thick, no galvanised/blackened. HMS 2 (203–206): ≥⅛” thick, may include galvanised/auto. Shredded (210–213): magnetically separated. Busheling (207): new clips, max 12”. Turnings (220–225). Cast iron (250–257).
• Wikipedia — Heavy Melting Steel: HMS 1 density ≥0.7 t/m³. Both grades exclusively obsolete scrap. Traded as blends (80:20, 70:30, 60:40).
• Okon Recycling — HMS Classification Guide: ISRI 200–202 for HMS 1, 203–206 for HMS 2. Neither includes newly generated industrial scrap.
• Steel Market Update — Scrap Definitions: HMS 1 = ¼” and over, no galvanised. HMS 2 = ⅛” and over, includes galvanised.
• Steel Dynamics Inc. Raw Materials Manual: Detailed scrap acceptance criteria — chemistry checks, density checks, radiation detection, visual classification.
• Ember Energy: IF electricity consumption ~625 kWh/t. EAF consumption ~400–550 kWh/t.
• Electroheat Induction: Standard induction furnace power consumption for steel: 625 kWh/ton.
• worldsteel / BIR: Global ferrous scrap use estimated at 630 MT in 2024.
• Yield percentages: Industry standard ranges compiled from ISRI, Steel Dynamics, and published EAF/IF operating data. Verified against IspatGuru and MDPI research publications.

This guide uses ISRI specifications as the global standard reference. Local market practices may use different terminology or grading. Yield percentages are typical industry ranges and vary with furnace condition, charge practice, and operator skill. Always verify scrap grade specifications with your counterparty before transacting.

Related on SteelMath: Scrap Yield Calculator · Scrap-to-Steel Production Cost Calculator · India’s Steel Production Cost Breakdown · Steel Weight Calculator