Indian Scrap imports have almost doubled in the last two years owing to the growth in demand for the raw material.
India imported a total of 8 MnT Scrap in year 2012-13, witnessing a 32% growth in imports in comparison to 6.8 MnT in FY 12. The overall imports increased owing to pre-booking for Scrap done 45-60 days earlier when rupee’s value against US dollar was around INR 55-56.
The Ministry of Finance, Government of India on 8th May 2013 imposed 2.5% basic custom duty on imports of Melting Scrap of Iron & Steel, Scrap of Stainless Steel for melting purposes and Aluminum Scrap and additional duty of 4% on imports of Brass Scrap was also levied.
Implementation of custom duty on Scrap has affected imports to India so far in FY 14. Trades have come down by 20-30% in the months following May’13. As a result, Scrap imports to India has been declining gradually M-o-M in May, June and July at 5.08 lac tonnes, 4.07 lac tonnes and 5.1 lac tonnes respectively.
Scrap to India is imported largely from Europe, Africa, Middle East, North America and Asia. This year imports from these countries for July were at 1.9 lac tonnes from Europe, 1.2 lac tonnes from Africa, 67,000 MT from Middle East region, 58,800 MT from North America and 19,500 MT from Asian countries.
Scrap to India was majorly imported through ports of Chennai, Jawaharlal Nehru Port Trust (Mumbai) and Ludhiana. In Chennai, imports for May, June and July 2013 were 1.41 lac tonnes, 1.27 lac tonnes and 1.16 lac tonnes respectively. Imports in JNPT were 98,100 MT, 70,900 MT and 82,500 MT respectively, while in Ludhiana, imports were at 87,700 MT, 64,300 MT and 96,600 MT respectively.
Currently, Scrap offers for HMS (80:20) are hovering around USD 353/MT, for HMS (1&2) at USD 343/MT and Shredded Scrap at around USD 370/MT. The offers have increased from last month that were at around USD 345/MT for HMS (80:20), USD 335/MT for HMS (1&2) and USD 360/MT for Shredded Scrap.
The main reason behind price increase is Turkey’s increased Scrap imports. Turkey is presently importing scrap from US and UK in large quantity owing to which offers from these two nations have gone up, resulting in import price rise for India.