I would follow the tech.....
At first at the steel tech I would introduce the re-smelting (plates) technology with general scrap-tech
Later on when oil processing starts then the attached scrap recipes with additional research.
As currently you research the tech (also somewhat very fast, but for a simple resmelting it feels ok) you have all researched..
This feels a little like future tech available now....
Also I am not sure; It’s an idea.....
You could make some sepcialized science-pack(s) (maybe as an option, maybe freely available from the start?) (out of equally scrap & source item, ie. 1 iron-plate & 1 iron-scrap ) due to even today in reality its difficult to recycle.
Also for some reason that you (maybe) be not drowned in scrap and get a clear hint whats to be done about that matter
Further on the research / science pack could maybe used for some improved scrap-processing (means scrape processing leads to less scrape (if I am right processing scrap-plates will lead to a certain amount of 0.06 of scrap still; this amount could then be reduced, so in the end you can process more scrap, because less recircling; eventually counter this at start with an higher scrap probability (0.20, ?) as currently ? )
On second thoughs seems to complicated, but if you resolve to introduce a own specialized scrap-processing-plant you can make the processing faster by adding/researching more tiers of this scrap-processing-plant, maybe even interesting for high volume scrap-types
Fine fitting will be also if you could include this research tree possibility also in the library for other mods (if you resolve to make this, and if its possible)
Yes this will make it all more complicate, but if you resolve to add this mod then you are beyond reasons on this matter :-)