Indian Furnaces Prefer Domestic Scrap Over Imported

Indian induction furnaces prefer domestic scrap over imported owing to disparity in prices.

Indian billet manufacturers are preferring domestic scrap over high cost imported scrap. Manufacturers claim that, the domestic scrap is cheaper by about INR 1,500-1,700/MT (USD 23-26) than the landed cost of imported material.

For instance, landed cost of imported scrap from Dubai (which is popular among Indian buyers owing to prompt delivery) is around USD 345/MT (INR 22,400). CIF value being considered as USD 305/MT CFR Nava Sheva, India. Where as domestic scrap prices of almost same specification is around INR 20,500-21,000/MT (USD 315-323); excluding GST. Please refer below table for calculation of imported scrap.

Market participants also reported that buying interest for imported scrap is low from induction furnaces as most of them are facing liquidity issue and they are comfortable sourcing scrap and sponge iron from domestic market on credit.

No major booking heard from induction furnaces this month although some special steel manufacturers have booked US and UK origin quality scrap. This week 10,000 MT Shredded and Busheling scrap booked by a special steel manufacturer at a price of USD 320/MT and USD 345/MT CFR India.

Over all, Indian imports of scrap are likely to be down by 10-11% in 2017 versus 2016. Last year India imported 5.37 million tonnes, this year volumes are expected to be around 4.8 million tonnes.

Imported scrap landed cost to the West coast based Plant

Source: SteelMint Research