Continued slide in rupee against USD has hit Indian Ferrous Scrap importers
hard with steel manufacturers deciding not to make
fresh import of scrap until the domestic currency stabilizes. Manufacturers
take a halt in import market specially Punjab Iron and Steel Industry.
“Due to lesser imports ingot
manufacturers are in a rush to secure domestic scrap. Also demand for sponge
has increased significantly. If rupee continues to remain weak for few more
days prices will certainly shoot up”, said a local trader based in
Ludhiana.
The rupee plunged to as low as 55.85/USD
today after closing at 55.39/40 per USD on Tuesday.
Punjab secondary steel makers are one of the
biggest importers of high melting scrap from various countries including Europe
and Middle East for using it as input to produce secondary steel. In Punjab,
over 250 induction and arc furnaces import about 2 lakh MT of scrap per month
to convert into iron and steel.
Importers who did not resort to hedging for
protection against currency fluctuations faced heaviest amount of losses in
import of scrap. According to furnace owners, the scrap is now costing Rs
3,500/MT costlier to them because of currency fluctuation.
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