This paper examines how circular economy principles are understood and applied within the Swedish steel industry, situated within a broader European policy context. Drawing on qualitative interviews with industry and academic respondents, it explores drivers, barriers, and opportunities shaping the transition toward circular and low-emissions steelmaking. The findings show that while Sweden’s nearly fossil-free electricity mix, strong policy framework, and rising market demand create favorable conditions, progress remains constrained by high capital costs, technological immaturity, and limited availability of high-quality scrap. Respondents emphasise that economic feasibility and market acceptance currently outweigh policy ambition as determinants of change. Circularity is widely supported in principle but challenged in practice by material and infrastructural limitations. The paper concludes that Sweden’s structural advantages position it as a frontrunner and testbed for circular steel production, provided that coordinated action aligns technological innovation, market incentives, and regulatory frameworks.