Restrictions of importing Unshredded Scrap at ICD Raipur, led to its shortage in the market.
Shortage of raw material and poor demand for steel are two important factors, which are substantially affecting Mini Steel Plants (MSPs) in Chattisgarh. The state is home to about 200 MSPs, which require raw material like Shredded Scrap for their operations. According to Chhattisgarh Mini Steel Plant Association (CGMSPA), actual availability of Shredded scrap is mere 5,000 MT per year. Scarcity is because of the fact that, Inland Container Depot (ICD) Raipur is not allowed to import Unshredded Scrap.
‘An ICD is a facility for landing and temporary storage for export, laden of containers for domestic use & warehousing. They offer various advantages like decreasing turnaround time for ships, lower freight to increase trade flow & optimum use of surface transport that results in reducing the congestion of sea ports’
As reported, many requests have been filed to seek permission from Ministry of Finance (MoF) but there were no results. The requests were declined owing to incidents of loss of life and property due to presence to explosive materials imported in Unshredded Scrap. Hence, on grounds of national security and risk to human life, MoF is not in favor of additional ports.
Conversely, MSPA, DGFT Delhi & Home ministry describe such incidence as completely imaginary. Even if it is assumed to be true, then it will raise serious question on security of other ICDs where such imports continue to happen.
In the month of August, to avail maximum advantage of falling INR, traders exported large quantities of Iron ore Pellets and because of dull domestic market & expensive import, Scrap inflow to India declined by 0.15 MnT which created shortage of 0.4 MnT & hence Scrap prices inflated to INR 1,500/MT m-o-m for August and INR 1,300/MT m-o-m for September, 2013.
Trade is almost at a halt, various sources and reports indicate that trade will not resume until the value of rupee strengthens. Experts are of opinion that there has to be more price corrections to make trade viable. Under such circumstances, ICD or no ICD, shortage is going to linger the operations.