India: Imported Scrap Supplies affected by the new FTP

Scrap imports to India get affected as Scrap suppliers from Middle East  suspend loading material to India post announcement of Foreign Trade policy (FTP).

Recently released legal FTP 2015-2020 by the Ministry of Commerce, has called for the new regulation of videographing of material being loaded, exporter & inspector of the material under pre-shipment inspection certification (PSIC) procedures for metal Scrap imports in India.

Apparently, the intention of government is to protect Indian consumers from malpractices and to keep a check on quality of imports. However, there is a lot of negative response from the market over the acceptance of amendment.

According to market participants, this regulation would add up to their cost of imports and reduce their options of Scrap exporters/suppliers.

As per the new rule, the Scrap exporter/supplier would be responsible for arranging the material inspector & preparing the video of entire loading of Scrap in containers. This has made overseas exporters/suppliers hesitatant to trade with a country enforcing such strict rules and lengthy procedures.

[su_pullquote align=”right”][su_note note_color=”#c2d6e9″ text_color=”#0b0a0a”]”This is just an unnecessary move from the government, making trade lengthier and expensive. And if the move (rule) talks about quality inspection, we already have a procedure to pass through strict custom inspection while importing, which we can say, solves the problem of quality check”, said an industry expert.[/su_note][/su_pullquote]

Today, to address the above concern, Metal Recycling Association of India (MRAI) is expected to meet officials at the Directorate General of Foreign Trade (DGFT) for discussing the disadvantages of the amendments. It is upon the ministry to deal with the issue, but until then Scrap supplies to India would remain disturbed.

Stepping back from the trade with India is an exemplary move by Scrap suppliers from the Middle Eastern countries. It is also heard that suppliers from Europe, South Africa & Australia have put their trades at halt, and may proceed after getting a clear direction from the Indian Steel ministry.

Influenced by the above sentiments, most of the suppliers have increased their offers on high sea sales basis. HMS 80:20 from Middle East is heard to have offered at USD 300/MT CIF India. Meanwhile, some trades are on halt, as participants are still doubtful about the amendments made. Offers remained undaunted, at USD 275-280/MT (HMS 80:20) and USD 295-300/MT (Shredded) from Europe.

Global Scrap prices as on 9 Apr’15

Source: SteelMint Research