Falling sponge iron production and rising power prices have forced Indian steel mills to import more scrap in FY 2012-2013 according to data released by Ministry of Commerce. India is 3rd largest importer of scrap after Turkey and Korea, with an annual seaborne trade of 8 million tonnes (including stainless and melting ferrous scrap).
According to data released total imports of scrap in 2012-2013 stood at around 8 million tonnes against 6.81 million tonnes in 2011-2012 and 4.5 in the year 2010-2011. Scrap imports to India have continued to grow for the reasons that sponge production have been hampered due to measures taken government to curb illegal iron ore mining.
More over rising power prices have also made steel mills to prefer scrap over sponge iron as melting scrap consumes less electricity as compared to sponge iron.
Industry experts also mention that another reason for increase in imports to Indian market is falling iron ore prices in global market, which has made Chinese buyers to go for iron ore over scrap, which has also weighed on scrap prices in global market.
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