With the primary sector also considering plans to increase the scrap charge in BOFs due to sustainability reasons, estimated domestic demand for ferrous scrap is likely to reach ~70 mn t by 2030. India’s ferrous scrap demand is expected to grow at 7% to reach ~40 mn t annually by 2025 from the current ~30 mn t, Yogesh Bedi, Chief, Steel Recycling Business, Tata Steel, told SteelMint.
Prior to the disruption caused by the pandemic, India’s scrap demand hovered around 30-32 mn t. Out of this, approximately 25 mn t was available locally while the balance ~7 mn t was being imported by the furnaces and mills.
Entry of organised players
Entry of organised players in the metals recycling space will help pave the way for de-integrated and modular steel production, closer to markets, which will bring consistency in scrap supply to furnaces, reduce logistics costs and dependence on imports, said Bedi.
He further said entry of organised entities will streamline the currently unorganized scrap supply chain by making available quality processed scrap, enhance transparency and lower dependency on imports. He also added, it will enhance the traceability and statutory compliance’s.
Further, he said, “Organised players will bring about mechanisation in scrap processing through state-of-the-art plants and equipment like balers, shredders, shears, material handlers etc. This will reduce manual operations and ensure a safe work environment for the workforce. The resulting high quality scrap will help satiate long-standing demand for quality scrap by EAFs/IFs/foundries.”
In late July this year, Tata Steel flagged off its first raw material consignment of ferrous scrap for trials at its steel recycling plant being set up at Rohtak, in Haryana.
Govt incentives needed
Bedi feels the government may think of providing several incentives to the authorized scrap processing/dismantling units. Firstly, for scrap availability and to keep the logistics costs low, the scrap processing centers must be located in or near the cities. In view of exorbitant land cost in most cities, the government may provide/earmark recycling zones and provide land at cheaper rates, he said.
Secondly, he said, the government should consider rationalising the tax structure for the scrap industry. “There should be nominal or no tax on obsolete scrap as it is tantamount to double taxation, as the initial product was already taxed. Being a nascent industry, subsidies and tax holidays may be required to ensure viability. Most of the machines are imported, so duties may be re-looked at to facilitate deployment of state-of-the-art machinery,” he said.
Thirdly, he feels, since scrap processing equipment is power-intensive, the government may provide power and other utilities at preferential rates.
Vehicle scrappage policy
Hailing the impending policy, he said it will offer multiple benefits. These include removal of old and polluting vehicles, thereby reducing emission and pollution. Moreover, these vehicles would be replaced with those with better technology that will offer lower permissible emissions.
Further, the policy would boost new automobile demand while scrappage of old vehicles will lead to creation of jobs.
“The policy will make available quality scrap for the secondary steel industry, so that they can make better and higher grades of steel. Also, it will reduce imports of scrap which would mean less drain on forex”, Bedi re-iterated.
By Madhumita Mookerjee
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