India’s ferrous scrap import volumes in Jan-Jul’21 dropped 7% y-o-y to 2.4 million tonnes (mn t) against 2.5 mn t seen in Jan-Jul’20, as per data maintained with SteelMint. Preference for domestic scrap and sponge iron restricted scrap import bookings.
The UAE continued to be the largest supplier to India, at 0.73 mn t in Jan-Jul’21 followed by the UK and the US at 0.19 mn t each.
However, on a m-o-m basis, Indian import volumes fell marginally by 3% to 0.31 mn t in Jul’21 as against 0.32 mn t in Jun’21.
Imports from UAE up, UK volumes fall: India’s imports of ferrous scrap from the UAE were at 0.73mn t in Jan-Jul’21, surging 92% as compared to 0.38 mn t in Jan-Jul’20.
On the other hand, the UK supplied ferrous scrap totalling 0.19 mn t in Jan-Jul’21, a drop of 42% as against 0.33 mn t in the same period last year.
Key reasons for decrease in import volumes
- Tight scrap availability and hike in freight rates due to shortage of containers kept imports slow. Preference was given to domestic substitutes like local scrap and sponge iron.
- Buyers adopted cautious approach as prices moved up on limited container and scrap availability. Container constraint remained major concern for importers, forcing steelmakers to carry on production with domestic scrap due to surge in imported prices.
- At the beginning of the year, with the Budget announcement ahead, buyers had been cautious and had decided to wait and watch before making fresh bookings due to the unstable market.
Imported scrap prices: The prices for shredded scrap further increased to $495/t CFR in Jan-Jul’21 from $286/t CFR in Jan-Jul’20.
In contrast, prices of HMS (80:20) increased to $461/t CFR in Jan-Jul’21 from $263/t CFR in Jan-Jul’20.
Outlook
India’s imported scrap market may remain dull owing to weak demand with a preference tilting towards domestic substitutes. However, construction activities may see an uptick in the upcoming months due to the seasonal demand rebound post-monsoon.
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