Scrap steel accounts for 30-40% of raw material costs in round steel production. When scrap prices rise (e.g., from 300 to 500/ton), hot-rolled carbon round steel prices increase by $100-150/ton. Electric arc furnaces (using 100% scrap) are more sensitive to scrap price fluctuations than blast furnaces (using iron ore). In 2021, global scrap shortages (due to reduced recycling during COVID) raised round steel prices by 25%, affecting industries like construction and automotive. Scrap price volatility is a key challenge for manufacturers, who often use long-term contracts to mitigate risks.