Ferrous Scrap Imports to India Fall Sharply in Aug’15

As per the custom data, scrap imports to India fell by around 30% M-o-M.

India imported total of around 352,000 MT of ferrous scrap this August, witnessing a fall of around 30% M-o-M. In the previous month, scrap imports were recorded 506,000 MT.

Meanwhile, the total scrap import to India from Jan-Aug’15 is recorded at around 3,645,000 MT (3.6 MnT), out of which scrap imports from UAE contribute around 15% followed by US (14%) and UK (13%).

Reasons for sharp fall in import

Low demand prevailing in market during June-July’15 is certainly an important factor for less booking of scrap, along with:

1. PSIC (Pre-shipment inspection certification) norms coming in force from 1 July’15 has also restricted scrap imports in the nation to significant levels. Many importers remained inactive during June-July’15 due to uncertainties and confusion in the minds of participants regarding policy.
2. Domestic scrap prices fell upto INR 2,000/MT (USD 30) in a month’s time. HMS prices, which were around INR 22,500/MT in the month of June’15, had sharply fell to INR 18,500/MT, ex-Mumbai in July’15 and inclined scrap buyers towards domestic purchase over imports. Noticeable fall in Pig iron and sponge also led to cause major shift in interest.

Outlook

SteelMint anticipates scrap imports to remain low in the month of Sept’15 as not much of booking has taken in market on the backdrop of falling INR and volatile prices.

Secondly, sponge iron production is expected to increase in the coming months, due to the fall in iron ore and coal prices in domestic market.