The Indian steel industry has been on a roll so far in FY23 as domestic steel production and consumption have both inched up y-o-y. The sheer volume of bulk ferrous scrap arrivals in the country is an indicator of growth in steel production and demand. With a staggering 2.27 million tonnes (mnt) of ferrous scrap arriving in India via bulk consignments, the industry is well on its way to meeting rising demand for steel products.
From the bustling port of Chennai to the coastal town of Hazira, let’s take a closer look at the arrival of bulk ferrous scrap into India during FY23 and its implications for the steel industry.
Notably, scrap arrivals have slowed down in 2023 compared to the previous year. India’s bulk ferrous scrap imports fell by 27% m-o-m to 300,517 t in February 2023 from 413,619 t in January, according to SteelMint data. Bulk scrap imports kept dropping after hitting an all-time high of 462,561 t in December last year.
The US and UK were the top exporters in February at 207,612 t and 54,601 t, respectively, followed by Venezuela at 38,305 t.
Additionally, the country imported bulk scrap totalling around 2.23 mnt during the July-February period of the ongoing fiscal.
Chennai, a major auto hub, remained a prominent destination for bulk scrap imports into India, followed by Kandla and Vizag.
Supplier market overview
- Major exporter: Schnitzer from the US remained the major bulk scrap supplier to India at 368,818 t in the July-February period followed by EMR and AIM, which supplied 266,972 t and 189,713 t, respectively. Further, SIMS, Indicca, Metro, Swiss Singapore and IMR were among the top suppliers.
- Port-wise exports: Los Angeles port in the US, which loaded around 268,369 t of scrap in February, was the top exporting port. Cargoes loaded at the port comprise approximately 20% of all US scrap exports. Boston was another busy port, with a total of 184,144 t of shipments in July-February. Liverpool in the UK loaded 298,782 t in July-February.
- Grade-wise exports: Major mills usually prefer high-grade material from the US and UK, with a recovery rate of over 95% and 2-3% impurities. Indian mills imported around 1.13 mnt of shredded scrap, whereas another 828,931 t of heavy melting scrap (HMS) was imported in July-February.
Key buyers and ports
- Major buyers: Chennai-based Suryadev booked a total of 314,906 t of scrap, while another Chennai-based mill, A-One Steel And Alloys, imported 121,135 t. Gujarat-based Mono Steel was the biggest importer from Kandla port at 268,110 t.
- Major importing ports: Total bulk scrap cargo arrivals at Chennai port stood at 977,554 t. Mills in south India were active in booking bulk cargoes. Chennai is a major market in south India and the units there are mainly IF/EAF-based, which use scrap and sponge iron as the basic feedstock. Chennai accounts for 60% of the country’s automotive sector and has the biggest share with 35% of revenues.
The other major bulk scrap destination was Kandla in west India that handled 819,877 t of imports of ferrous scrap, with Mono Steel being the biggest importer during the period under review.
The arrival of bulk ferrous scrap in India during FY23 has been significant, with Schnitzer emerging as the top supplier. Despite a dip in imports in February, the industry is poised for growth. In the coming days, the Indian steel industry will continue to rely on bulk scrap imports as domestic generation falls way short of demand.
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