Thirty-two percent of the liquid metal used to make flat steel products in Europe does not end up in a final product. Sixty percent of this material is instead scrapped during manufacturing and the remainder during fabrication of finished steel products. Although this scrap is collected and recycled, remelting this scrap requires approximately 2 MWh/t, but some of this material could instead be diverted for use in other applications without remelting. However, this diversion depends not just on the mass of scrapped steel but also on its material characteristics. To enhance our understanding of the potential for such scrap diversion, this paper presents a novel material flow analysis of flat steel produced in Europe in 2013. This analysis considers the flow of steel characterized not only by mass but, for the first time, also by grade, thickness, and coating. The results show that thin-gauge galvanized drawing steel is the most commonly demanded steel grade across the industry, and most scrap of this grade is generated by the automotive industry. There are thus potential opportunities for preventing and diverting scrap of this grade. We discuss the role of the geometric compatibility of parts and propose tessellating blanks for various car manufacturers in the same coil of steel to increase the utilization rates of steel.